Collateral
How do tokenized stocks work as collateral?
A tokenized stock is a token that tracks a listed share, issued by a third party. Once the rail counts it, the token is valued, takes a haircut, and counts for a share of its value that the card spends against, while the position stays in the market.
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Why does a stock take a large haircut?
Because it moves the most. The haircut is the share of value held back as a cushion, and the more an asset moves the more is held back.
Cash takes a small one because it holds its value. The account shows the share for each asset before you deposit it, and shares can change.
The cushion is what lets a price fall before your spending exceeds what your collateral supports.
What is the required level?
The level your locked collateral has to stay above, relative to what you have drawn. A charge that would take it below that level is declined.
Repaying part of the balance or depositing more restores headroom.
When can collateral be sold?
When the cushion is gone. Collateral can be sold to cover what has been drawn, at market prices and on the market's timing, and a sale can happen without notice.
It realises whatever gain or loss the position carries at that moment. The account agreement will carry these terms. The drafts are at /legal.
What does the rail back today?
USDC. Stocks held as tokens are counted as the rail adds them, and no share is printed for one before then.
USDC
BTC
AAPL
Where can you read more?
Public explainers on securities-backed lending and on stocks held as tokens, from regulators and central banks, are collected on our Learn page.
Keep the position. Spend against it.
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