Handling procedures for fractional fees

It should be noted that certain exchange fees as well as IB commission rates are established at levels beneath  that of the smallest increment by which a given currency is defined (e.g. $0.01 in the case of the USD).  In the event a customer incurs a fee having an extended value below this minimum increment, the fee will be calculated at its extended value and then rounded up or down to the nearest whole minimum increment of that currency.   

This rounding process may result in occurrences where the aggregate rounded commission charge as reflected in the cash balance section of the Activity Statement on a given day is $0.01 higher than the sum of the rounded charge reflected on a line item basis in the trades section. An example of this may occur for a sample series of option trades for a given day is provided below. 

EXAMPLE:

Action Calculated Fee (extended) Statement - Trades  Section (rounded at a line item level) Statement - Cash Balance Section (rounded at an aggregate level)
Customer buys one U.S. securities option, incurring a minimum commission charge of $1.00 plus an exchange Option Regulatory Fee of $0.014 $1.014 $1.01 N/A
Customer buys one U.S. securities option, incurring a minimum commission charge of $1.00 plus an exchange Option Regulatory Fee of $0.014 $1.014 $1.01 N/A
Totals $2.028 $2.02 $2.03

 

 

 

How do I determine which market data subscription is applicable for a given security?

IBKR provides account holders with a Market Data Assistant tool which assists in selecting the subscription services available for a given security (stock, option or warrant) they wish to trade. The search results show all exchanges upon which the product trades, the subscription offering and its monthly fee for both Professional and Non-Professional clients as well as the depth of market variations associated with each subscription.

To access the Market Data Assistant:

  1. Log in to Client Portal
  2. Click on the Help menu (question mark icon in the top right corner) followed by Support Center
  3. Scroll down and select Market Data Assistant
  4. Enter the Symbol or ISIN and the Exchange
  5. Choose a value for the optional filters: Professional/Non Professional subscriber status, Currency and Asset
  6. Click Search
  7. Review the available options and decide which subscription best meets your needs.

Find more information on the market data selections page of the IBKR website.

Glossary terms: 

ADR pass-through fees

Account holders maintaining positions in American Depository Receipts (ADRs) should note that such securities are subject to periodic fees intended to compensate the agent bank providing custodial services on behalf of the ADR.  These services typically, include inventorying the foreign stocks underlying the ADR and managing all registration, compliance and record-keeping services.

Historically, the agent banks were only able to collect the custody fees by subtracting them from the ADR dividend, however, as many ADRs do not regularly pay dividends, these banks have been unable to collect their fees.  As a result, in 2009, the Depository Trust Company (DTC) received SEC approval to begin collecting these custody fees on behalf of the banks for ADRs which do not pay periodic dividends.  DTC collects these fees from its participant brokers (such as IB) who hold the ADRs for their clients.  These fees are referred to as pass-through fees as they are designed to be then collected by the broker from its clients.

If you hold a position in a dividend paying ADR, these fees will be deducted from the dividend as they have in the past.  If you hold a position in an ADR which does not pay a dividend, this pass-through fee will be reflected on the monthly statement of the record date in which it is assessed.  Similar to the treatment of cash dividends, IB will attempt to reflect upcoming ADR fee allocations within the Accruals section of the account statements as well. Once charged, the fee will be reflected in the Deposits & Withdrawals section of the statement with the description 'Adjustments - Other' along with the symbol of the particular ADR it is associated with.

While the amount of this fee will generally range from $0.01 - $0.03 per share, the amounts may differ by ADR and it is recommended that you refer to your ADR prospectus for specific information.  An on-line search for the prospectus may be conducted through the SEC's EDGAR Company Search tool.

Glossary terms: 
ADR

Options Regulatory Fee (ORF)

The ORF is an exchange fee which OCC collects from its clearing members, including IBKR. Its stated purpose is to assist in offsetting exchange costs relating to the supervision and regulation of the options market (e.g., routine surveillance, investigations, and policy, rule-making, interpretive and enforcement activities). The fee was initiated by the CBOE in mid-2009, by each of the BOX, ISE and PHLX in January 2010, by AMEX and ARCA in May 2011, by Nasdaq in January 2012, by C2 in August 2012, by Miami in January 2013, by ISE GEMINI in August 2013, by BATS in February 2015, by Nasdaq BX in February 2016, by BATS EDGX in February 2017, by PEARL in February 2017, by MERCURY and EMERALD in February 2019, and MEMX in September 2023. As of January 1, 2024, it is assessed to customer orders at a rate of $0.02685 per U.S. exchange listed option contract with the rate per exchange as follows: 

EXCHANGE ORF
AMEX 0.0038
ARCA 0.0038
BATS 0.0001
BOX 0.00295
CBOE 0.0017
C2 0.0002
EDGX 0.0001
EMERALD 0.0006
ISE 0.0013
GEMINI 0.0012
MERCURY 0.0004
MIAX 0.0019
MEMX 0.0015
NOM 0.0016
NASDAQBX 0.0005
PEARL 0.0018
PHLX 0.0034
Total 0.02685

Note that the ORF is assessed on all trades, both buys and sells, in addition to the IBKR commission charge as well as any existing exchange fees (e.g., liquidity removal) and will be reflected on the Activity Statement as a Regulatory Fee.

When I short a stock, when will the hard to borrow interest begin accruing?

Short positions will have a borrow interest/fee associated with them.

Borrow interest will begin being charged on a short position from short settlement date to buy-to-cover settlement date.

For example, you sell XYZ on Monday, and you close the position on Tuesday. Borrow interest would start to be charged upon Wednesday's settlement date (T+2). Interest would cease to be charged on Thursday, the settlement date (T+2) of the buy-to-cover order.

 

Understanding interest charges when the net cash balance is a credit

An account will be subject to interest charges despite maintaining an overall net long or credit cash balance under the following circumstances: 

1. The account maintains a short or debit balance in a given currency.

For example, an account maintaining a net cash credit balance equivalent to USD 5,000 comprised of a long USD balance of 8,000 and a short EUR balance equivalent to USD 3,000 would be subject to an interest debit based upon the short EUR balance.  There would be no offsetting credit on the long USD balance as it is less than the USD 10,000 Tier I level above which interest is earned.  

Account holders should note that in the event they purchase a security which is denominated in a currency that they do not hold in their account, IBKR will create a loan in that currency in order to settle the trade with the clearinghouse. If one wishes to avoid such loans and their associated interest charges, they would need to either deposit funds denominated in that particular currency or convert existing cash balances via the Ideal Pro (for balances of USD 25,000 or above) or odd lot (for balances less than USD 25,000) venue prior to entering into your trade. 

2. The credit balance is comprised  principally of proceeds from the short sale of securities. 

For example, an account maintaining a net cash credit balance of USD 12,000 which is comprised of a USD debit of 6,000 in the security sub-account (less the market value of any short stock positions) and a short stock market value credit of USD 18,000 would be charged interest on the Tier 1 debit of USD 6,000 and would earn no interest on the short stock credit as it falls below the USD 100,000 Tier I level.

3. The credit balance includes unsettled funds.

IBKR determines interest debits and credits solely based upon settled funds. Just as an account holder is not assessed interest charges on funds borrowed to purchase a security until such time that purchase transaction settles, the account holder will not receive an interest credit, or offset against a debit balance, on funds originating from the sale of a security until such time the transaction has settled (and IBKR has been credited funds by the clearinghouse).

 

If I change my address with IB, will my billing address be automatically changed for my direct billed NYSE Professional market data subscription?

 

No. The subscriber must change the updated address directly with the NYSE through their website located at www.nyxdata.com/mds. Once on the NYSE website, the subscriber will need to click on Account Profile Change link located under the Account Information Changes menu.

Does IBKR provide for a dormant or inactive account status?

While there is no provision for dormant or inactive account status, there is no monthly minimum activity requirement or inactivity fee in your IBKR account.

While we have no minimum account balance, should the account balance fall below USD 2,000 IBKR is precluded, by regulation, from affording margin treatment to securities positions. In addition, account holders will also be billed for any market data subscriptions maintained and, as a matter of policy, will have subscriptions terminated automatically when the account balance falls below USD 500.

Individuals seeking to close an account are encouraged to refer to our User's Guide to familiarize themselves with the steps and prerequisites for taking this action.

Add/Remove Liquidity

Overview: 

The goal of this article is to provide proper understanding of exchange fees and add/remove liquidity fees for the Tiered commission schedule.

 

The concept of adding or removing liquidity is applicable to both stocks and stock/index options. Whether or not an order removes or adds liquidity is dependent on that order being marketable or non-marketable.

Marketable orders REMOVE liquidity.
Marketable orders are either market orders, OR buy/sell limit orders whose limit is at or above/below the current market.

1. For a marketable buy limit order, the limit price is at or above the Ask.

2. For a marketable sell limit order, the limit price is at or below the Bid.

Example:
XYZ’s stock current ASK (offer) size/price is 400 shrs at 46.00. You enter a buy limit order for 100 XYZ stock @ 46.01. This order will be considered marketable because an immediate execution will take place. If there is an exchange charge for removing liquidity, the customer will be charged that fee.


 

Non-Marketable orders ADD liquidity.
Non-marketable orders are buy/sell limit orders in which the limit price is below/above the current market.

1. For a non-marketable buy limit order, the limit price is below the Ask.

2. For a non-marketable sell limit order, the limit price is above the Bid.

Example:
XYZ’s stock current ASK (offer) size/price is 400 shrs at 46.00. You enter a buy limit order for 100 XYZ stock @ 45.99. This order will be considered non-marketable, because it will be posted to the market as the best bid, and instead of being immediately executed.
If and when someone else sends a marketable sell order that causes your buy limit order to be executed, you should receive a rebate (credit), if an add liquidity credit is available.
 
 

PLEASE NOTE:
1. All accounts trading options will be subject to any options exchanges’ remove/add liquidity fees or credits.
2. Per IBKR’s website, only negative numbers under the Remove/Add Liquidity schedules are rebates (credits).
 
For more information visit:

What is the meaning of removing from, or adding liquidity to, the market?

Overview: 

The first point to understand is what a marketable order is.  Marketable orders are either market orders or buy and sell limit orders whose limit price is at or above/below the current market price.  A marketable buy limit order would have a limit price set at or above the current ask in the market.  Conversely, a marketable sell limit order would have a limit price set at or below the current bid in the market. 

Marketable orders remove liquidity from the market. 

Non-marketable orders are buy and sell limit orders in which the limit price is below/above the current market price.  A non-marketable buy limit order would have a limit price that is below the current ask in the market.  Conversely, a non-marketable sell limit order would have a limit price that is above the current bid in the market. 

Non-marketable orders add liquidity to the market.

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