Information Regarding IB's Calculation of Unbundled Commission Monthly Trade Value

IB currently offers a cost+ pricing commission structure for select European and Asian exchanges. Customers may take advantage of reduced commissions based on the volume traded on a monthly basis across eligible exchanges.

European Cost+ Commission

Currently IB offers the cost+ commission structure for stocks in Belgium, France, Germany, Italy, Netherlands, Switzerland, Norway, Sweden and the UK.

IB maintains the EUR-equivalent, CHF-equivalent, USD-equivalent, GBP-equivalent, NOK-equivalent and SEK-equivalent trade values of all executions traded under the cost+ model. Conversions are done using the prior day's exchange rate. This accounting allows for a customer whose primary trading is on the Swedish stock exchange to easily compare statement information to the tier breaks on the IB website and still receive the benefit of a reduced tier when trading a EUR-denominated stock eligible for cost+ pricing.

Asia/Pacific Cost+ Commission

Currently IB offers the cost+ commission structure for trades in Australia, Hong Kong, Japan and Singapore. IB maintains the AUD-equivalent, HKD-equivalent, JPY-equivalent and SGD-equivalent trade values of all executions traded under the cost+ model. Conversions are done using the prior trading day's exchange rate. This accounting method allows for a customer whose primary trading is on the Hong Kong stock exchange to easily compare statement information to the tier breaks on the IB website and still receive the benefit of a reduced tier when trading a JPY-denominated stock eligible for cost+ pricing.

General

Tier breaks and the applicable commission rates are provided on the IB website. In general, volume/value tiers are calculated once daily, not at the time of the trade. As such, execution reductions will start the trading day after the threshold has been exceeded.

Example

Assume an account has executed trades on the Hong Kong stock exchange on August 1 against a trade value of 15,100,000 HKD. The account's monthly trading value will be tracked as follows:

HKD value = 15,100,000

SGD value = (15,100,000 x 0.16048 exchange rate) = 2,423,248

JPY value = (15,100,000 x 10.075 exchange rate) = 152,132,500

The following day, for an execution on the Tokyo stock exchange commissions will be based on the month to date trade value as expressed in JPY, which in the example is 152,132,500. This month to date trade value exceeds the Tier 1 threshold therefore the trade will be commissioned at the Tier 2 level, or 0.05%.

Note that the above may lead an account to be charged commissions on two different tiers on the same trade date due to exchange rate fluctuations. Traders should take note of this possibility when trading across multiple venues.

Please be aware that examples provided above are for instructional purposes only and may not reflect current commission rates. Please always refer to the IB website for the most updated commission and fee rates.