Trading Limits explained

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What is a trading limit?

Your trading limit is the maximum value of a buy order that you can place. It will vary depending on your account type, Standard or Premium, whether you have any funds available (from BPAY or sale proceeds), and if you have any open and/or unsettled buy trades on each trading account.

Find out more about our Standard and Premium account offerings.

Standard Accounts

Standard accounts operate on a funds up front basis, which means you need to have these funds available in your trading account before you place a trade. To deposit funds up front you must first BPAY funds into your account. If you have an outstanding credit due to BPAY and/or sale proceeds, you can use up to this amount prior to placing a trade or BPAY additional funds to trade more.

The Netwealth Share Trading Biller Code is 16303. Each share trading account has a unique Ref. If you have more than one account, please ensure you have selected the correct trading account prior to transferring funds.

To find your BPAY details go to My Account > My Profile > Personal & Account Details, click on the ‘Account Details’ tab and locate the BPAY information at the bottom. Funds take approximately 24-48 hours to clear and be available for trading.

Once the funds provided by BPAY exceed 20 business days, funds will be transferred back to the linked settlement account.

BPay Details

Examples

1. BPAY

Amanda has BPAYED $20,000 into the trading account. Since there is now capital in the account, she can commence purchasing shares up to $20,000. When the funds hit the 20th business day1, we will transfer the residual amount to Amanda’s linked settlement account, consequently reducing her trading limit down to $0, as seen on 19/11/2021.

Transaction date

Value ($)

Details

Trading Limit ($)

20/10/2021

+$20,000

BPAY Received

$20,000

21/10/2021

-$5,000

BUY 350 ABC

$15,000

26/10/2021

-$5,000

BUY 250 LMN

$10,000

26/10/2021

-$5,000

BUY 200 XYZ

$5,000

19/11/2021

+$5,000

Direct Credit

$0

2. BPAY and Contra

Bruce has BPAYED $5,000 into the account. Since there is now capital in the account, he can commence trading up to $5,000, unless he sell shares, then he can trade up to the value sold + $5,000.

Transaction date

Value ($)

Details

Trading Limit ($)

13/08/2020

+$5,000

BPAY Received

$5,000

14/08/2020

+$15,000

SELL 300 ABC

$20,000

14/08/2020

+$3,000

SELL 2500 XYZ

$23,000

14/08/2020

-$15,500

BUY 250 KLM

$7,500

16/08/2020

+$7,500

Direct Credit

$0

In this example, Bruce has BPAYED, sold and bought shares so contra applies. The capital provided by the BPAY will first be used instead of using the sale credits to cover the outstanding debit.

As the purchase on 14/08/2022 for KLM is greater than the BPAY credit that entered the account on 13/08/2020, the full BPAY amount has been used. Bruce is now owing $10,500, however he has sold $18,000 worth of shares which is greater than the outstanding amount, therefore Bruce is left with a residual credit of $7,500. This amount will be direct credited to Bruce on T+2, being the 18/08/2020.

Premium Accounts

Premium accounts have a $25,000 trading limit which allows you to purchase up to this amount without funds up front. The funds will then automatically be debited from your linked settlement account on T+22. If you wish to trade beyond this amount, you are required to BPAY and/or use sale proceeds within the contra period. If you have an outstanding credit due to BPAY and/or sale proceeds, the credit will be used first before the $25,000 trading limit is reduced. Please note that contra affects settlement. If you have bought and sold shares within T+1 then you may be debited the residual amount.

Examples

3. No funds up front + trading limit ($25,000)

Transaction date

Value ($)

Details

Trading Limit ($)

 

 

Trading Limit

$25,000

10/11/2020

-$24,500

BUY 7500 LMN

$500

12/11/2020

-$24,500

Direct Debit

$25,000

John has a $25,000 trading limit due to the structure of the premium account. He has no existing funds or credit in his account. John bought $24,500 worth of LMN on 10/11/2020 (T) which left him with a residual trading limit of $500. He did not place any other trades, so on 12/11/2020 (T+2) a direct debit was run on his linked settlement account for $24,500. John’s trading limit is restored to $25,000 as there are no more unsettled debits or open trades on this account.

4. Funds up front + trading limit ($25,000)

Transaction date

Value ($)

Details

Trading Limit ($)

 

 

Trading Limit

$25,000

04/04/2022

+$50,000

BPAY Received

$75,000

05/04/2022

-$30,000

BUY 3000 ABC

$45,000

05/04/2022

-$20,000

BUY 6000 DEF

$25,000

06/04/2022

-$25,000

BUY 2500 XYZ

$0

08/04/2022

-$25,000

Direct Debit

$25,000

Jamie has a $25,000 trading limit due to the structure of the premium account. Jamie deposited $50,000 into his account via BPAY, thus boosting his trading limit to $75,000.

He then purchased $30,000 of ABC on 05/04/2022. As there is a BPAY amount on the account, funds for the purchase of his ABC shares will be taken from the BPAY amount until it has been used in full. A direct debit would then be made for the remaining sum. The purchase of ABC will reduce the BPAY credit from $50,000 to $20,000 and as such reducing the total trading limit to $45,000.

That same day, Jamie purchased an additional $20,000 worth of DEF shares, which now brings the BPAY credit to $0 (as there was $20,000 credit unused), leaving Jamie’s trading limit now at $25,000. The following day 06/04/22, Jamie purchased $25,000 of XYZ, thus reducing his trading limit to $0. On settlement date (T+2) 08/04/2022, the owing amount is debited, restoring the trading limit to $25,000 as there are no more unsettled debits or open trades on the account.

Upgrade to a Premium Account

To apply for a Premium account, complete and return the Share Trading Premium Account Application or go to Products & Services > Forms & Brochures > Administration & Maintenance. Premium accounts incur slightly higher brokerage rates. Please refer to the Financial Services Guide (FSG) for a breakdown of these costs.

To learn more about your trading limit or account structure, call us on 1800 888 223 or email us at support@sharetrading.netwealth.com.au.

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1 This date may vary due to business conditions.

2 failure to settle your trade/s within the required time will incur $110 fail fee per day or 0.11 (whichever is greater) to a maximum cap fee of $5,500 per fail per day as outlined in the FSG.



This information is intended to provide information for educational purposes only and is subject to change at anytime without notice.

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