ACCOUNT RELATED
What is the minimum to open an account?
There is no minimum to open a cash account. If you want a margin account and would like margin privileges, then you must maintain a minimum balance of at
least $2,000. When trading, you must meet the buying power requirement to place the trade.
What type of accounts does Eddid USA offer?
Is my account safe and protected?
Eddid Securities USA Inc. is a member of Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000
(including $250,000 for claims for cash). For more information, please visit SIPC.
Is there any tax for Foreign Investors?
As a general rule, foreign investors (i.e. non-U.S. citizens and residents) with no U.S. business are typically not obligated to file a U.S. tax return, including on
income generated from U.S. capital gains on U.S. securities trades. Instead, when investing with Eddid USA as their broker-dealer, our clearing firm will withhold
the required U.S. taxes on U.S. income and gross proceeds, as applicable, and pay the withheld tax and report to the IRS directly.
Foreign investors must continue to certify their non-U.S. citizen and resident status through submitting required documentation (e.g. the applicable W-8 form)
and may be able to receive reduced U.S. tax withholding by identifying the country where they claim to be a resident for income treaty purposes.
Eddid USA foreign investors who are non-U.S. residents and residents of a tax treaty country with a valid Form W-8 on file may be able to claim a reduced rate of
withholding under an income tax treaty. Other foreign investors generally pay a flat 30% withholding tax on certain interest and dividend income from U.S.
securities investments.
Please see IRS Publication 515 for more information on tax rates applicable to non-residents.
Is there any Estate Tax for Foreign Investors?
Foreign investors are generally subject to a low estate tax threshold of US$60,000 before being subject to U.S. estate tax at a rate up to maximum of 40% above
this threshold on U.S. situated assets, such as securities of U.S. companies. However, assets that are exempt for U.S. estate tax generally include securities that
generate portfolio interest (e.g. U.S. treasury and U.S. government agency securities and certain U.S. corporate bonds and U.S. commercial paper), and dividend
income from certain foreign corporations or offshore mutual funds are generally not subject to U.S. estate taxes. Executors for non-residents must file an estate
tax return or Form 706-NA. Please note that the U.S. estate tax rules for foreign investors may be modified by applicable estate and gift tax treaties.
Please see IRS Publication 515 for more information on tax rates applicable to non-residents.
How can I update my account information?
Please send us an email at help@eddidusa.com and tell us the change of account information.
FUNDING AND TRANSFER
How can I fund my account?
How can I transfer my account from another Brokerage firm?
You can transfer your assets to Eddid USA from another brokerage firm or bank by ACATS. Please fill out and submit the Customer Account Transfer Form, attaching your most recent statement from your previous brokerage firm.
How can I withdraw fund from my account?
You may withdraw funds from your account by requesting a wire transfer or ACH. For domestic wire, please fill out and submit the Domestic Wire Request Form. For international wire, please fill out and submit the International Wire Request Form. For ACH, please fill out and submit the ACH Instructions Form. Please note that there is a fee of $25 for all outbound domestic wires and a fee of $50 for all outbound international wires. There is no fee for outbound ACH.
TRADING
When are market trading hours?
You can trade US equities during all market sessions starting at 4:00AM EST until 8:00PM EST.
"Extended hours trading" means trading outside of "regular trading hours". "Regular trading hours" generally means the time between 9:30 a.m. and 4:00 p.m.
Eastern Standard Time. Eddid USA does not advocate or suggest that extended hours trading is suitable for all customers by simply offering the service of
extended hours trading. Customers shall familiarize themselves with these risks and make a well-informed decision as to whether extended hours trading is
appropriate for their investment objectives and risk tolerance. Please review Extended Trading Hours Risk Disclosure to learn more about the risks associated
with extended hours trading.
What are the margin requirements for stocks?
| MARGIN REQUIREMENTS | |||
|---|---|---|---|
| Type of Security | REG-T Initial | House Maintenance | |
| EQUITIES | |||
| LISTED EQUITIES / Natl. Securities Exchange, NYSE, AMEX, NASDAQ or Regional Exchange | 50% | The greater of 30% of market value or $2.00 per share | |
| Non Listed - Non Marginable | 100% | 100% | |
| SHORT SALES EQUITIES | 50% | Securities priced at $5. per share or greater, the greater of 35% of market value or $5. per share Securities priced below $5. per share, 100% of market value or $2.50 per share, whichever is greater | |
| *Listed Equity securities trading less than $4.00 a share will be considered non-marginable for Reg-T calculations | |||
Please note that the margin requirements will vary depending on the type of security. At any time, the initial and maintenance requirements on any security can
change without prior notice and can go into effect immediately. Furthermore, accounts whose account equity falls below the required maintenance requirement
can be liquidated without prior notice. To prevent forced liquidations, we advise clients to keep a buffer above the minimum equity requirement.
What is Pattern Day Trading (PDT) and Why did I get a minimum equity call?
The term “pattern day-trader” is a regulatory designation which means any account that executes four or more day trades within a rolling, five business-day period. The PDT rule applies to margin accounts only. Once an account is flagged as a Pattern Day Trader, total account equity needs to be maintained at above $25,000 in order to day trade. A minimum equity call will be issued when margin account value falls below $25,000 at the close of business the previous day. As a result of the call, the account will be restricted from Day Trading.
A margin account must close above $25,000 or higher to meet a minimum equity call, or you can meet the call by depositing funds.
What is Good-Faith Violation (GFV)?
A good faith violation (GFV) occurs when a cash account buys a stock or option with unsettled funds and liquidates the position before the settlement date of the sale that generated the proceeds.
If you incur 3 good faith violations in a 12-month period in a cash account, your account will be restricted to using only settled funds for 90 days.
Account holders who wish to have access to unsettled funds prior to the settlement day may do so by electing an account type of 'Margin'. Under this account type unsettled funds may be used for trading purposes but may not be withdrawn until settlement. Account holders maintaining a 'Cash' account may request an upgrade to a 'Margin' type account by sending the request to help@eddidusa.com. Upgrade requests are subject to a compliance review to ensure that the account holder maintains the appropriate qualifications.
The minimum account value requirement for margin trading is $2000. Margin trading is only for experienced investors with high risk tolerance.
For further information about margin trading, please see Eddid Margin Disclosure https://www.eddidusa.com/uploads/soft/20211209/MarginDisclosureStatement.pdf
OPTIONS TRADING
What are the strategies available at different Options Trading level?
The options strategies allowed for each options trading level:
*A margin or cash account is required to place Level 1 trades.
*A margin or cash account is required to place Level 2 trades.
*A margin account is required to place Level 3 trades.
*A margin account is required to place Level 4 trades.
What are the minimum equity requirements for options strategies?
| Options Strategies | Minimum Equity Requirement |
|---|---|
| Covered Call writing | No minimum |
| Cash-secured Puts | No minimum |
| Long calls and Puts | No minimum |
| Spreads and combinations | $2,000 |
| Uncovered Put writing | $25,000 |
What are the margin requirements for options?
| MARGIN REQUIREMENTS | |||
|---|---|---|---|
| Type of Security | REG-T Initial | House Maintenance | |
| OPTIONS | |||
| Long Options | 100% | 100% | |
| Uncovered (Naked) Options | 100% of premium plus % (see below) of underlying market value, less the out of the money amount. Minimum requirement is 100% of premium plus a % of the underlying value (see below). | ||
| Listed Equity / Narrow Based Index | 20% | 20% | |
| OTC Equity / Narrow Based Index | 45% | 45% | |
| Listed Broad Based Index | 15% | 15% | |
| DEBIT Spread | 100% OF NET DEBIT | ||
| CREDIT Spread | Difference in strike prices multiplied by the contract quantity or the naked requirement on the short leg, whichever is greater. | ||
OPTIONS EXPIRATION, EXERCISE AND ASSIGNMENT
Options Expiration policy
Expiring long and short option positions may be closed by Eddid as early as 2:00PM EST on the last trading day prior to expiration if you do not have the funds or buying power to buy or short the underlying stock or ETF. Short option may be closed out by us even if it is out-of-the-money as you may still get assigned. We may close your positions without prior notice.
All expiring options that are at least $0.01 in-the-money (ITM) will be eligible for automatic exercises at expiration. However, we may or may not exercise your option automatically. We may need to contact you for further instructions. If we are unable to reach you, we may not be able to proceed with the exercise. In some instances, there may not be enough equity in the account to make full settlement on the terms of the option.
What do I need to do on the expiration day if my expiring options are in-the-money?
For long option positions, automatic exercise will occur for all options in-the-money by $0.01 or more. For short option positions, you have no control over assignment. The only way to avoid assignment is to close the position before the expiration of that contract.
It is very important if you have positions that are in-the-money that you keep a close eye on these positions and understand what your choices are for these options on Expiration Day.
You can:
What if I don’t have enough buying power to cover the resultant stock position of an
expiring in-the-money option?
On the expiration day, we closely monitor all expiring option positions. Usually we will allow our clients to take action in their own accounts by 2:00PM EST on the expiration day. If you do not manage the expiration risk in your account prior to 2:00PM EST, We reserve the right to buy, sell, or otherwise close positions to manage the risk in your account.
We may:
Can I trade same-day-expiring options?
Opening positions in same-day-expiring options will not be accepted. Any unexecuted good-till-cancel opening position same-day-expiring options orders will be cancelled by our Trade Desk at market open on the expiration day.
How do I exercise my long option contract?
If your long option contract expires in-the-money by at least $0.01 (based on the closing price of underlying stock or ETF at expiration), Eddid USA will automatically exercise it for you on the expiration day. If you would like to exercise your long option before the expiration day, you can:
send an email to help@eddidusa.com with the following details before 3:15PM EST
OR
submit a ticket via Eddid Trader Mobile App or Eddid Trader Pro - Help Center with the following details before 3:15PM EST
Customers that exercise a long option contract will pay the full aggregate exercise price provided for by the option contract. The cut-off time for submitting exercise requests is 3:15pm for the days prior to the expiration day. Any requests submitted afterwards are processed on a best-effort basis. The exercise request is processed overnight, and your position and balances will be updated on the next business day.
How do I request an exercise-by-exception?
If you have a long option contract that expires out-of-the-money (OTM) and want to exercise it, you may submit an Exercise By Exception request by 4:15PM EST on the expiration day. You can:
send an email to help@eddidusa.com with the following details
OR
submit a ticket via Eddid Trader Mobile App or Eddid Trader Pro - Help Center with the following details
Customers that exercise a long option contract will pay the full aggregate exercise price provided for by the option contract. The cut-off time for submitting exercise-by-exception requests is 4:15pm on the expiration day. Any requests submitted afterwards are processed on a best-effort basis. The exercise request is processed overnight, and your position and balances will be updated on the next business day.
Assignment of short option contract
When you are assigned, you have the obligation to fulfill the terms of the contract. When you sell to open an option contract (short option), you can typically get assigned at any time prior to expiration, even if the short option is out-of-the-money. The only way to avoid assignment is to close the position before the expiration of the contract.
Eddid USA allocates the assignment of exercise notices among short positions according to an automated procedure. This procedure randomly selects from among all short option positions (including positions established on the date of assignment) those contracts that are subject to exercise.
All American-style short option positions are liable for assignment at any time. The assignment process may result in multiple partial assignment and/or multiple transactions to fulfill a single assignment, and a separate charge will apply to each partial assignment or transaction needed to complete an assignment.
Things to note about options exercise and assignment
Eddid reserves the right to prohibit the exercise of stock options and/or close short options if the exercise/assignment would place the account in margin deficit. Accounts with insufficient funds to exercise may post substantial risk should an adverse price change in the underlying occur upon delivery.
To protect against these scenarios as expiration nears, Eddid reserves the right to either:
While Eddid reserves the right to take the above actions, Eddid is under no obligation to manage such risks. Account holders are solely responsible for managing the exercise/assignment risks associated with the positions in their accounts.
Note that Eddid generally initiates expiration related liquidations 2 hours prior to the close, but reserves the right to begin this process sooner or later should conditions warrant. If Eddid determines the exposure is excessive, we may liquidate positions in the account to resolve the projected margin deficiency. In addition, the account may be restricted from opening new positions to prevent an increase in exposure.
All exercises & assignments are processed overnight. For assignment, there is no definitive way to know if you will be assigned or how many contracts will be assigned for the short option position in your account until the next morning after the counterparty’s exercise request is processed. For spread, the long leg of your spread will not be automatically exercised if you were assigned early. The long option contract may only get exercised automatically when it expires in the money.
There is a $15 charge for exercises and assignments.
What is Dividend Risk?
If your account has any short call options (covered call or call spread position), there is a risk that you’ll get assigned on your short call options the night before the ex-dividend date.
When this happens to the covered call position, the shares you have as collateral will be called away and you will not be entitled to the dividend payment.
When this happens to the call spread position, your account will have a short stock position on the ex-dividend date, and you will actually be responsible for paying that dividend on the payable date.
You can avoid this by closing your option position before the market closes at 4:00PM EST on the day before the ex-dividend date.
On the trading day before the ex-dividend date, we will check if your account has enough buying power to cover the dividend that you may probably have to pay to the other party when the short leg of your spread position may potentially get assigned. If your account does not have enough buying power to cover the dividend payment, we reserve the right to close out your spread position before the market closes at 4:00PM EST on the day before the ex-dividend date in order to help reduce the risk in your account.
