Investing in the stock market is developing rapidly all over the world. Various investment and broker-dealer companies offer diverse trading systems for acquiring securities from leading international companies. Armenian investment company, Apricot Capital, has also launched its online trading platform for investing in both Armenian and international companies and managing finances effectively.

We had a discussion with Vachik Gevorgyan, the executive director of Apricot Capital, covering topics such as the company, the Apricot Capital mobile application, margin trading opportunities, and the future of the investment field.

- Mr. Gevorgyan, Apricot Capital was founded in 2022, and it has gained the trust of numerous individual and institutional clients in this short period, what do you think is the reason for this?

- Certainly, due to reasons widely recognized by all, investment practices and this type of activity and culture in the financial field are not very popular in Armenia. However, people are not adequately informed. Apricot Capital's mission is to make investment tools accessible and create a platform for people to effectively invest and manage their savings.

It is very important for us that our clients have access to the best technologies, investment tools and services in the investment industry with convenient and safe tools. Therefore, our professional team willingly provides both professional advice and tries to create the most comfortable and efficient platform for investors. I believe one of the reasons for our success is our dedicated and purposeful work.

- Let's talk about how to become an investor using the Apricot Capital mobile application.

- To make investing and acquiring securities as simple and accessible as possible, we consistently refine our investment platform, with a primary focus on our mobile application. As a result, numerous investment instruments, both international and local, are now available through the Apricot Capital mobile application. We also offer a demo version of the application, which I think is a great advantage for our users. A brokerage account can be opened without a contract, enabling users to explore all the features of the mobile application, execute transactions with virtual money, and accurately assess the advantages and potential investment risks.

- You mentioned that a number of financial instruments are already available through the application. More importantly, what is margin trading and what tools and opportunities are we discussing?

- Currently, our application offers a range of services including foreign currency exchange (for example, AMD, US dollar, euro, pound sterling, yen, etc.), government bond buying and selling, and investment opportunities in global financial markets. The Apricot Capital application provides not only a standard, but also an opportunity to open a margin account.

In general, margin in the financial field is understood as a loan secured by collateral, which allows investors to purchase or sell additional securities. Frequently, people who want to acquire a security, but do not have enough financial resources, often approach their broker, instead of borrowing money or taking a loan from the bank. Margin trading can be described as an alternative to a bank loan. A margin is provided with the security of financial means, funds or securities, which is used to make additional investments.

The so-called “Magnificent Seven” of technology companies are particularly attractive to our compatriots. These companies include Apple, Microsoft, Amazon, Tesla, Nvidia, Google, and Adobe. Certainly, the securities of these companies can be acquired both with margin and without it.

- What are the concepts of initial margin, minimum, or maintenance margin in margin trading?

- The initial margin is the minimum amount of cash or securities that a client must maintain in their account to secure a loan and open an additional investment position with us. Maintenance margin is the minimum amount that must be available in a margin trading account to maintain an investment position. When the amount in the account is less than the specified minimum amount, we inform the user, sending a notification often referred to as a “margin call”. Then we offer the user the option to replenish the account or sell a portion of their assets.

- Could you mention some of the risks associated with margin trading?

- Risk is one of the key factors that significantly influences financial decision-making. I can separate systemic and non-systemic risks. Systemic risks include financial, political crises, natural disasters, wars, and etc. Margin traders are especially susceptible to market risk, such as sudden fluctuations in asset prices and overall market volatility. This vulnerability arises because they frequently engage in trading with borrowed funds, which can lead to substantial losses if the market moves against the investment positions they have opened. Non-systematic risks are risks specific to a particular company. For example, Elon Musk represents both an opportunity and a “risk” for Tesla (smiles-Banks.am). Both ups and downs of the company are influenced by the decisions he makes. I believe that in the case of a well-diversified portfolio, potential risks decrease. Offering precise information to investors is also a means to mitigate risk. An investor can make effective financial decisions when they have a complete understanding and information about the given issue.

As a licensed investment company, we prioritize offering favorable investment conditions and continually enhancing our technological capabilities. Our team promotes effective investment decision-making and competent portfolio management for our clients by utilizing effective and innovative tools.

The goal is to make investment culture in Armenia accessible and appealing to everyone.