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.

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 rate^C – exchange rate^P , 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.

The processing of exercise notices for American style options on days other than the expiration date is not performed on a real-time basis, but rather as part of a nightly batch process by the Options Clearing Corporation (OCC).   The processing sequence, which by definition results in a notification lag of at least one day to the assigned client, is as follows: 

• OCC generally allows its clearing members to submit exercise notices on behalf of the clients holding a long position electronically throughout the day, but generally no later than the start of their critical processing in the evening (Day E). 
• As part of its evening position processing sequence, OCC randomly assigns the exercise notices it has received to the open interest of its clearing members.  That information is then made available by OCC to its clearing members early in the morning on the following day (Day E+1). 
• At the point in which that information has been made available, clearing firms such as IBKR have already completed their processing of that day’s trade activity in order to provide timely statements, margin and settlement information to their clients.  Also, since OCC carries the client positions of its clearing members in an omnibus manner (i.e., they do not know the identity of the clients, only the clearing firm), the clearing member must, in turn, execute a random process to assign those exercise notices to clients holding a short position in that particular option series. 
• Once IBKR receives notice of the assignment from OCC and completes its random assignment process, the assignments will be readily posted to the Trader Workstation of the impacted accounts and reflected on the Daily Activity Statement as of that day’s close (E+1). 

In addition, due to this processing sequence and the fact that a long option may have remaining time value, IBKR cannot automatically provide an exercise notice to OCC for any long option spread against the assigned short option as a means of offsetting the ensuing delivery obligation. 

Account holders should refer to the Characteristics and Risks of Standardized Options disclosure document which is provided by IBKR to every option eligible client at the point of application and which clearly spells out the risks of assignment.  This document is also available online at OCC's web site.

Information relating to tax obligations is reported as required to the tax authorities within your country of residence as well as other countries if trading products subject to any local withholding requirements.  Unless specifically directed by a taxing authority, IBKR does not withhold taxes on proceeds from security sales. We are required by US tax law, for example, to withhold US taxes on dividends paid by US corporations to foreign persons at a rate of 30%. This rate may be lower if the US has entered into a tax treaty with your country. In addition, investment interest income is not subject to US withholding. All withholdings for non-US persons and most entities will be reported on Form 1042-S at the close of each year. For further information refer to IRS publication 901 and/or your tax advisor.