IB charge "debt interest" - what is it?

Discussion in 'Interactive Brokers' started by 50 cent, Jun 9, 2005.

  1. def / IB support -

    I trade eminis through IB. Why am I being charged "debt interest" lately? What is the nature of this charge? I was never charged "debt interest" before throughout my history with IB, why did this charge appear all of a sudden?

    Could you please explain.

    Thanks for your help
    50 cent
  2. alanm


    IB: Also note that it is mis-spelled "debt" (instead of "debit") on the statements.

    It sure would be nice if the detail of the credit/debit interest calculation were provided, too. Other firms do this. Example:

    2.000% 05/04-05/28 $28319
  3. Steve_IB

    Steve_IB Interactive Brokers

    50 cent-
    Please send these type of queries to the helpdesk together with your account number. If you have debit interest, then your ending settled cash in a currency would have been a negative number on one or more days during the last month. You can check your daily statements for this.

    Interest rate details are on our website under, Fees>>Margin and Interest Rates.

    Alan -
    Due to the way we calculate interest this would do be possible. Please see above page.
  4. i had no days in which the settled cash was negative. however i will refer to the helpdesk like you said.
  5. jrkob


    50cent I'd be curious to have your report after you talk to IB.

    Just to make sure everything is alright with these chaps.

    Thank you.
  6. ktm


    It seems my interest for May was sharply lower than for April, despite having about the same account balance and patterns of margin use. Did anyone else notice a significant drop? Did IB change the way interest is being calculated? I could be missing something in my own account, but the amount of interest is about 25% of the amount for prior months.
  7. alanm


    Quote from Steve_IB:
    Due to the way we calculate interest this would [not] be possible. Please see above page.

    It says:

    "Interest will be credited or debited at the end of each month during the first week of the subsequent month, and will be based on the month's average benchmark rates.

    The credit rate will be applied to the average monthly credit balance, the short credit rate to the average monthly short credit balance, and the debit rate to the average monthly debit balance."

    This seems to say that you use the average rate for the whole month times the average balance for the whole month. So, the dates, rate, and balance are known.

    If (as I suspect) what it says is wrong, and you calculate each day's balance times that day's rate, you could still work it back to the averages. Certainly the date range is known.

    What am I missing?
  8. i have been charged some more interest now. i sent helpdesk an email and they said they will inquire and get back to me.

    the puzzling thing is that i was never charged interest before, and i still do what i always did (trade eminis), with the same account size.
  9. Dr._Bob


    50 cent,

    I am having the exact same problem. I have two currencies in my IB account. Both never had a negative balance throughout the month of May. I never have open positions at the end of the day.

    Yet I was charged debit interest in both currencies. It happened for the first time this month.

    The interest calculation for May seems to be buggy. First they had the issue that they just took last month' values for interest credits and on top of that they charged interest where none is due.

    This is worrisome, especially since there is no way for me to check IB's interest calculations.

    Helpdesk is looking into it.
  10. ktm


    I will have to email the helpdesk as well. My interest was a credit, not debit but was still reduced 75% from the prior month. Either some formulas changed, it's a bug or I'm missing something.
    #10     Jun 11, 2005