Hello, my question regards to how IB is handling margin accounts. Assume I have $ 20,000 cash in my margin account and would buy an etf for $ 5000. The remaining $ 15.000 would remain in cash. Would i have to pay interest on this purchase, if i hold this etf for weeks? Thanks
No you don't have to pay interest. You only pay interest when you purchase securities with a gross value of more than $20,000 (In your case), hence you get financed by IB by whatever the amount above the $20,000 and that's what you pay interest on.