IB accrued interest

Discussion in 'Forex Brokers' started by gwac, Feb 14, 2006.

  1. gwac


    Can someone explain to me how you can have
    neg accrued interest when you have no positions
    past 5 pm....
  2. What did IB say?
  3. gwac


    I am still waiting form an explanation. I did have one overnite
    trade that i forgot to cover, i was long gbp for 3 days( over
    the weekend. They charged me the equivalent of 10 points
    which anywhere else would 0 or 1. This how they make big
    time money. They take advantage of any overnight positions.

    IMHO its very scummy.

    The way around this is trade futures....Anyone know the
    feed cost on ib for cme.

  4. def

    def Sponsor

    IB handles interest very equitably and I'm sure there is a proper explanation which you should receive from the CS desk. All interest rates are posted on our site.
  5. It's included in the US bundle for free ($10 if you pay less than $30 a month in commissions/fees).
  6. gwac


    I think I realized what they did.

    I went home long GBP on wed, that deal does not settled
    till fri, but they charged me 5 days interest and gave me 5 days
    worth of int on the gbp. Because they overcharge on interest
    and underpay on int owed to you and they take two more
    days even though the deal does not settle for them until FRI.

    This is the only way I can come up with the ridiculous amout of int they charged.

    I will never take another overnite position with them again.
    That is robbery.

    I covered the deal on Thursday

  7. The way Ib deals with interest is very transparent on their site and very fair in my mind.
    Furthermore, the interest you get on your funds is very high. I don't know of any other broker that gives you higher interest.

    That said, I tried to trade FOREX with IB and didn't like the way IB handles the accounting side (maybe I couldn't understand it fully). Long story short, I moved to trade currency futures on CME.
    Liquidity is more than enough. The spreads are as tight as FOREX (1-3 pips) and these futures are integrated much "cleaner" in IB environment. For example, there is no issue with interest because it is priced in the future contract.
  8. gwac


    I have traded interbank for 20 years. It is not transparent,
    the calculations are not even on their statements.

    Interbank gbp/usd is aprox 0 for the weekend, not
    10 points. That is a ripeoff. I also use IFX that
    gives interbank on rolls and they do it base on the proper
    day count in the fx market. Spread there is 2 points
    and no brokerage.

    I am also going to trade futures instead, what is brokerage
    on 1 contract (125k euro)?

    Is ther anyone out there that gives a fair deal on cash FX? I am
    beginning to think not.

  9. The multiple days of interest for holding a position over 5 PM on Wednesday is the industry standard. Spot forex is 2 day deliverable (1 day for USD/CAD) so a trade held on Wednesday after 5PM Eastern time has a position on Thursday in the forex world and that means that it will not be delivered till Monday.

    Yes, Euro FX on CME is 125K per contract.


  10. gwac


    Yes but is 3 days not 5.

    Wed contract settles on Fri
    Thurs contract settles on Mon

    That is 3 days

    The only way they could come up with int they charged me
    assuming they add 1.5% to the US and deduct .5% off the
    uk is to charge me 5 days.

    Assuming I was long GBP and short USD

    Which is if they added wed and thurs also.
    #10     Feb 14, 2006