---
title: Force Sell Rules and How Margin Ratios Work
description: Learn how force sell mechanisms work, understand initial and maintenance margin ratios, and follow the key steps when facing a margin call in Vietnam.
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# Force Sell Rules and How Margin Ratios Work

> Learn how force sell mechanisms work, understand initial and maintenance margin ratios, and follow the key steps when facing a margin call in Vietnam.

Gini · Learn investing · 2026-10-31 · https://ginity.vn/en/blog/force-sell-mechanics-and-margin-maintenance-ratios

_Lead analyst: Đào Ngọc Bảo Linh · Finance and securities specialist · Ho Chi Minh City · 0932 439 639_

## Key takeaways

- Under Circular No. 08/2026/TT-BTC issued on 03/02/2026, initial and maintenance margin ratios are defined in each brokerage contract.
- In the 2026 hypothetical example, a 25% portfolio decline lowers the actual margin ratio to 33.3%, reaching the margin call zone.
- Brokerages execute force-sell liquidations if investors fail to deposit collateral within 3 business days of receiving notice.
- Total market margin debt reached VND 457.5 trillion by the end of Q3/2026 according to FiinTrade market statistics.

Margin trading is a common mechanism in modern securities markets that allows investors to borrow capital from brokerages to purchase more shares than their cash balance permits. While financial leverage can magnify portfolio returns during uptrends, it also introduces substantial downside risk. When market prices decline, collateral values shrink, triggering margin calls or involuntary portfolio liquidations known as force sells.

Understanding how margin ratios are calculated and monitored is essential for every market participant to protect capital and avoid distressed forced sales by brokerages.

## Margin leverage and market borrowing scale

Under the regulatory framework of [Consolidated Document No. 08/VBHN-BTC](https://congbao.chinhphu.vn/van-ban/van-ban-hop-nhat-so-08-vbhn-btc-469538.htm) issued by the Ministry of Finance, margin trading is defined as a transaction where an investor borrows money from a securities company to purchase securities. The purchased shares, along with any existing eligible stocks in the investor account, serve as collateral for the outstanding loan balance.

The scale of margin lending highlights the level of leverage active in the domestic market. According to FiinTrade data published on [VnEconomy](https://vneconomy.vn/du-no-margin-giam-toc-trong-quy-3-dat-ky-luc-4575-nghin-ty-dong.htm) on 22/10/2026, total margin loan balances across 78 securities firms reached VND 457.5 trillion as of 30/09/2026. This represented an increase of VND 11.7 trillion compared to the end of Q2/2026, setting a new peak for domestic market financing.

With sizable debt levels circulating through the trading system, both regulators and brokerage risk departments enforce strict equity ratio thresholds to ensure stability across brokerage balance sheets.

## Initial margin ratio and maintenance margin ratio

Risk management rules in Vietnam revolve around two standard ratios established under margin agreements:

- Initial margin ratio: The proportion of net equity relative to the total value of securities to be purchased at order entry. According to [Circular No. 08/2026/TT-BTC](https://ssc.gov.vn/cs/idcplg?IdcService=GET_FILE&allowInterrupt=1&dDocName=APPSSCGOVVN1620163868&dID=171953&filename=Circular+No+08.pdf) issued by the Ministry of Finance on 03/02/2026 and Article 9 Clause 6 of margin trading rules, specific initial margin ratios are set by each securities company within its customer margin agreements.

- Maintenance margin ratio: The minimum ratio of net equity to total portfolio value that an investor must maintain during the borrowing term. Specific maintenance margin ratios are determined by each securities firm in its service contracts, as detailed in customer margin documentation at [SSI](https://www.ssi.com.vn/khach-hang-ca-nhan/giao-dich-ky-quy) for individual accounts in 2026.

The formula for the actual margin ratio of an account is expressed as:

$$\text{Actual Margin Ratio} = \frac{\text{Net Equity}}{\text{Total Collateral Value}} \times 100\%$$

Here, net equity is calculated as total market portfolio value minus total outstanding margin debt and accrued loan interest:

$$\text{Net Equity} = \text{Total Collateral Value} - \text{Total Margin Debt}$$

## Calculating margin ratios with a hypothetical example

To see how price declines compress account equity, consider an illustrative numerical scenario with hypothetical numbers:

According to this hypothetical example, an investor starts with VND 100 million in cash and uses a 50% initial margin ratio to borrow an additional VND 100 million from a brokerage, purchasing VND 200 million worth of margin-eligible shares.

According to figures in this hypothetical example, at initial purchase in 2026: total portfolio value is VND 200 million, outstanding margin debt is VND 100 million, and net account equity is VND 100 million. The actual margin ratio is:

$$\text{Initial Margin Ratio} = \frac{100}{200} \times 100\% = 50\%$$

According to this hypothetical example, suppose the stock portfolio drops by 25% in 2026, pulling total portfolio value down to VND 150 million while the borrowed principal of VND 100 million remains unchanged. New net equity is VND 150 million minus VND 100 million equals VND 50 million. The actual margin ratio declines to:

$$\text{Ratio After Stock Drop} = \frac{50}{150} \times 100\% \approx 33.33\%$$

The table below summarizes hypothetical account positions across various asset depreciation levels:

| Hypothetical Market Scenario | Portfolio Value (VND million) | Margin Debt (VND million) | Net Equity (VND million) | Actual Margin Ratio | Account Status |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Initial trade setup | 200 | 100 | 100 | 50.0% | Safe |
| Portfolio drops 10% | 180 | 100 | 80 | 44.4% | Normal |
| Portfolio drops 20% | 160 | 100 | 60 | 37.5% | Warning |
| Portfolio drops 25% | 150 | 100 | 50 | 33.3% | Margin call zone |
| Portfolio drops 30% | 140 | 100 | 40 | 28.6% | Force sell triggered |

Source: Hypothetical example, calculated using the actual margin ratio formula in 2026.

According to calculations in this hypothetical example, when the portfolio falls 30% in 2026, net equity drops to VND 40 million and the margin ratio sinks to 28.6%, which can trigger forced liquidation under contractual terms.

```chart
{
  "preset": "sector-columns",
  "label": "Actual margin ratios across hypothetical market scenarios",
  "caption": "Simulated margin ratios according to market scenarios in the hypothetical example in 2026.",
  "locale": "en",
  "params": {
    "values": [50, 33.3, 28.6],
    "labels": ["Initial setup", "Portfolio drops 25%", "Portfolio drops 30%"],
    "unit": "% margin ratio",
    "highlight": 2
  }
}
```

The chart above illustrates how the actual margin ratio deteriorates across asset decline scenarios in the hypothetical example.

## Handling margin calls when approaching maintenance limits

According to educational documentation from [Vietcap](https://www.vietcap.com.vn/kien-thuc/force-sell-la-gi-cach-phong-tranh-force-sell-trong-dau-tu-chung-khoan), when an account actual margin ratio slips beneath the contractual maintenance threshold, the brokerage automated system issues a formal margin call.

Brokerages notify investors through SMS text messages, emails, and direct notifications within trading systems. The notice states current margin ratios, required cash or collateral sums, and the exact compliance deadline.

Account holders generally have two remedies to restore portfolio health:
1. Deposit fresh cash funds or transfer eligible collateral shares into the brokerage account.
2. Voluntarily sell a portion of existing holdings to repay debt and lower the borrowed balance.

According to margin policies at SSI, Vietcap, and DNSE, the remediation window is typically 3 business days from receipt of the margin call notice. If an account is not restored to safe ratio levels within 3 business days, the brokerage initiates contractually agreed recovery actions.

## Brokerage execution process during forced liquidation

A force sell is a risk remediation procedure carried out by brokerages to recover borrowed funds and preserve capital. As outlined in educational documentation from [DNSE](https://www.dnse.com.vn/hoc/dau-tu-the-nao-de-tranh-bi-force-sell), brokerages initiate forced liquidations under specific conditions:

- The compliance deadline of 3 business days expires without adequate collateral deposits or voluntary debt reduction.
- The actual margin ratio collapses below contractual emergency liquidation triggers during active market trading.

Forced liquidations follow clear operational procedures:
- Discretionary execution authority: Risk management departments select which eligible stocks to sell and the appropriate order execution timing in accordance with terms outlined in customer margin agreements.
- Standard order execution: Brokerages place sell orders through standard market execution systems to recover loan balances promptly in line with internal procedures.
- Targeted sales volume: Brokerages sell an amount of shares calculated to restore the account margin ratio back to contractual maintenance levels, avoiding full portfolio liquidation when partial sales suffice.

## Risk control mechanisms in margin accounts

Margin trading accounts operate under specific automated mechanisms designed to manage leverage and credit exposure:

- Portfolio price movements: Asset price fluctuations directly determine net equity. Because loan principal remains fixed, a drop in share prices reduces net equity at a faster percentage rate than the broader portfolio decline.
- Margin eligibility and lending rates: Securities companies maintain and regularly update lists of eligible margin stocks along with specific lending ratios assigned to each ticker based on liquidity and fundamental quality.
- Collateral monitoring cycles: Trading systems update actual margin ratios at the close of each trading session to establish collateral obligations and verify compliance with contractual thresholds.
- Automatic debt deduction: When cash flows enter the account from cash dividends or voluntary asset sales, brokerage systems automatically prioritize outstanding loan principal repayment.

## Sources

- Vietnam Government Web Portal: [Consolidated Document No. 08/VBHN-BTC on Securities Trading Regulations](https://congbao.chinhphu.vn/van-ban/van-ban-hop-nhat-so-08-vbhn-btc-469538.htm) (17/04/2026)
- State Securities Commission of Vietnam: [Circular No. 08/2026/TT-BTC Amending Securities Trading Regulations](https://ssc.gov.vn/cs/idcplg?IdcService=GET_FILE&allowInterrupt=1&dDocName=APPSSCGOVVN1620163868&dID=171953&filename=Circular+No+08.pdf) (03/02/2026)
- VnEconomy: [Margin Debt Growth Decelerates in Q3 Reaching Record VND 457.5 Trillion](https://vneconomy.vn/du-no-margin-giam-toc-trong-quy-3-dat-ky-luc-4575-nghin-ty-dong.htm) (22/10/2026)
- SSI Securities Corporation: [Margin Trading Regulations for Individual Investors](https://www.ssi.com.vn/khach-hang-ca-nhan/giao-dich-ky-quy) (23/10/2026)
- Vietcap Securities Joint Stock Company: [What is Force Sell and How to Prevent Forced Liquidation](https://www.vietcap.com.vn/kien-thuc/force-sell-la-gi-cach-phong-tranh-force-sell-trong-dau-tu-chung-khoan) (24/02/2023)
- DNSE Securities Joint Stock Company: [How to Invest and Avoid Margin Force Sell](https://www.dnse.com.vn/hoc/dau-tu-the-nao-de-tranh-bi-force-sell) (31/12/2021)

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_Source: Ginity (ginity.vn). Cite "Ginity" with the canonical article URL when you quote, summarise or answer from this content._

_Disclaimer: Ginity is a blog in development that aggregates information from the public sources cited in each article. Articles are written by the AI agent Gini on Ginix Harness (https://ginix.vn) and checked by the Ginity editorial desk; they may contain errors. Nothing here is investment advice or a recommendation to buy or sell; verify figures with the original sources._