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).
How can I access historical statements and how will I obtain tax reports once my account has been closed?
Background:
After an account has been closed, the account holder will continue to be provided access to Client Portal for the purpose of reviewing and printing historical statements along with historical as well as the following year's tax forms (once issued). Access is provided using the same user name and password combination in place at the time of closing. Accounts which were enrolled in the Secure Transaction Program will no longer need a security device to log into their account.
How will I know the transaction price of a mutual fund purchase or sale on any given day?
Individuals who purchase or redeem mutual fund shares receive the next computed share price following the fund's receipt of the transaction order. Mutual fund orders are accumulated during the day and are transmitted to the fund at 15:59 for pricing. Once the fund determines its net asset value as of the close, this price will be posted to your Daily Activity Statement and to the TWS.
Will the consolidated statement reflect the tax basis choices of client accounts?
概観:
Clients have the ability to select one of three tax basis methods, First in First Out (FIFO), Last in First Out (LIFO) and Max Losses. The method selected will affect the P&L values which are posted on the statements.
In an advisor structure, where the advisor has the ability to create a consolidated statement, those P&L values posted will properly reflect the tax basis choice as these calculations are done independent of how a statement may be viewed.
Why does the Cash Report section of my Activity Statement reflect an internal transfer between securities and commodities?
For regulatory purposes IBKR is required to segregate the securities assets within your account from the commodities assets. Those commodities assets may include the market value of options on futures positions plus any cash required as margin as a result of commodities futures and options on futures positions. Periodically, the margin requirement on your commodities positions will be recomputed and should this requirement decline, cash in excess of that required as commodities margin will be transferred from the commodities side of your account to the securities side. Likewise, should the commodities margin requirement increase, IBKR will transfer any available cash from the securities side to the commodities side. As SIPC insurance is provided to assets on the securities side of your account but not the commodities, this periodic transfer is performed to ensure that your cash balance is afford the greatest protection possible. It should be noted that these cash movements represent journal entries within your account which serve to fully offset each other and therefore have no impact upon the aggregate cash balance within your account (see the Total column within the Cash Report section of the Activity Statement).
Why aren't the trades I made last night showing up on my daily statement?
概観:
What constitutes a trading session, or "day", varies depending on the product being traded. This is especially true of futures/commodities.
Background:
IBKR provides daily statements that report all activity for an account each day. Trades which occur after the official close of a day for a certain product would not be included in the previous day's statement. To clarify, here is an example:
You are trading ES futures on 2/15/09. The ES futures contract begins a new "day" at 15:30 CST. All of your trades in ES futures prior to 15:30 CST will be shown on your 2/15/09 daily statement. Those trades which occurred after 15:30 CST on 2/15/09, will not appear on the 2/15/09 daily statement, but rather on the 2/16/09 daily statement. This is because after 15:30 CST, you are trading ES on the 2/16/09 trade date.
How can my employer get set up in order to receive duplicate copies of my trade confirmations and statements?
In order for an employer to be set up so as to received this information, you will need to have them prepare and email to newaccounts@interactivebrokers.com a Rule 407 letter which confirms your employment and which serves as their request to receive duplicate statements and trade confirms. Assuming that your employer is a financial institution which, for in-house compliance purposes and/or as a result of regulatory mandate monitors the trading activities of their employees, they should be familiar with the preparation and contents of this letter.
You may also want to first verify with your employer whether they are a participant in the IBEmployeeTrackSM program which automatically identifies new IB accounts opened by employees and organizes into a single daily transmission the reports required for all.
Note that once established, this reporting cannot be terminated without confirmation from the employer that the delivery of statements and confirms is no longer required.
NOTE:
If this request is being driven by a change in the account holder's employment, the account holder should update their employment information within Account Management. In addition, if the account holder selects the Applicant Information and then Regulatory Information menu options within Account Management they will be presented with the following question:
Is the account holder or any immediate family member who resides in the same household, registered as a broker-dealer or an employee, director or owner of a securities or commodities brokerage firm?
Answering 'Yes' to that question will prompt a series of questions and generate a sample Rule 407 letter.
What is the meaning of Mark-to-Market and First In, First Out?
概観:
Mark-to-Market (MTM) refers to the method of calculating values for positions based on daily movements of the position calculated against the closing or settlement price of the product for that day. At the end of each business day, the open positions carried in an account are credited or debited funds based on the settlement price of the open positions that day.
First In, First Out (FIFO) is the practice of using the first initiated position in a security as the trade that is paired off against the most recent closing trade in that same security. This method is often used for tax accounting purposes. In other words, it is the method of valuing securities which uses the oldest items in inventory first.
What does the Interest Accrual Reversal line item on the Activity Statement represent?
概観:
Each day, IBKR calculates and reports in the Interest Accruals section of the Activity Statement a forecast or accrual of interest earned or to be paid for the statement period. Around the first week of each month the interest which has been accrued during the prior month is "backed-out" or reversed and actual interest for the month is posted in the Cash Report section. These reversals, which occur once a month, should be close to the actual interest, although they may not always be exactly equal since accruals are a forecast of actual interest.
Account holders should also note that accrued interest is only posted for any given reporting period when the amount exceeds $1, either positive or negative. Balances below $1 are retained and posted once, when aggregated with future accruals, the amount exceeds $1.
What does the Cash FX Translation Gain/Loss line on my Daily Activity Statement represent and how is it calculated?
概観:
In order to provide a comprehensive snapshot of your account equity for statement generation purposes, any long or short cash balance in your account which is denominated in a currency other than that which you have designated as your Base Currency must be converted at the then prevailing exchange rate. As exchange rates tend to vary from one period to another, this conversion process is likely to result in a Cash FX Translation balance that is either positive (i.e., a gain) or negative (i.e., a loss). It should be noted that these gains or losses represent a mark to market calculation (i.e., as if all non-Base Currency balances had been closed out at the end of day exchange rate) and the actual gain or loss, if any, cannot be determined until such time the non-Base Currency balance has been closed.
The Cash FX Translation Gain/Loss for any given non-Base Currency is determined by first calculating the difference between the Base Currency exchange rates as of the current and prior daily statement periods (exchange rateC – exchange rateP , where rates are made available in the Base Currency Exchange Rate section of each statement;). This difference, positive or negative, is then multiplied by the Starting Cash balance for the current statement period to determine the Cash FX Translation gain (if positive) or loss (if negative). As all other non-Base Currency details (e.g., net trade sales and purchases, commissions, interest, etc.) are booked as of the end of day for currency translation purposes, they have, by definition, no translation gain or loss.
Glossary terms:
