Interest and Financing

Calculating the Cost of Borrowing Stock at Interactive Brokers

There are two factors for daily cost/revenues associated with short selling of stocks and bonds at IBKR:

• Borrow Fee
• Short Sale Proceeds interest paid to you by IBKR

Stock Borrow Fee

TWS shows the following data for AAPL. The Fee rate* column reflects the Borrow Fee the account will be charged and shown on the account statement.

*TWS Fee rates are indicative intraday and may change due to market conditions between trade execution and settlement.

Statement

Value Date

Rates are based on a one-day look-back. The statement above is as of 6/21/2017 with a value date of 6/20/2017. That means the fee is being charged for holding the stock over market close on 6/20/2017.

Price

This is the cash collateral mark used to calculate interest. To see more information on collateral marks and how they are calculated, please see this page: Short Sale > Collateral

Value

Collateral cash value.

Fee Rate (%)

The annualized percentage borrow fee the account is charged.

Borrow Fee

The cash amount the account will be charged to borrow AAPL for 6/20/2017.

Short Sale Proceeds Interest

IBKR pays interest on Short Sale Proceeds based on the following schedule, calculated on the total short balance of the account.

The Short Sale Proceeds Interest rate that IBKR would pay an account with a short balance of \$5,000,000 is 0.628% (assuming the benchmark is 1.16%), computed as a weighted average of the tiers.

The weighted average rate can be computed on the calculator here.

Net Cost

The net cost/revenue to short AAPL for an account with \$5,000,000 in short balances is a credit of 0.378%, or \$0.15 per day, as illustrated in this chart:

Net Cost

Taking into account the Weighted Average Short Sale Proceeds Interest on a balance of \$5,000,000 (similar to the AAPL example above) of 0.628%, the net borrow cost/revenue is -49.56%, or a debit of \$2.48 per day.

Interest Paid to You on Short Sale Proceeds Cash Balances

For the purposes of crediting interest on cash equal to short stock collateral values, only accounts with Net Asset Value (NAV) exceeding USD 100,000 will be eligible to receive credit interest on these cash balances.

Pricing Plan:
IBKR Pro IBKR Lite

BM = Benchmark Rate
Currency Tier Rate Paid: IBKR Pro Rate Paid: IBKR Lite
USD 0 - 100,000 0% 0%
100,000.01 - 1,000,000 0.3% (BM - 1.25%) 0% (BM - 2.25%)
1,000,000.01 - 3,000,000 1.05% (BM - 0.5%) 0% (BM - 2.25%)
3,000,000.01 + 1.3% (BM - 0.25%) 0% (BM - 2.25%)
AUD 0 - 140,000 0% 0%
140,000.01 + 0% (BM - 2.25%) 0% (BM - 3.25%)
CAD 0 - 140,000 0% 0%
140,000.01 - 1,400,000 0% (BM - 1.75%) 0% (BM - 2.75%)
1,400,000.01 - 3,000,000 0.572% (BM - 1.1%) 0% (BM - 2.75%)
3,000,000.01 + 0.772% (BM - 0.9%) 0% (BM - 2.75%)
CHF 0 - 100,000 -1.106% (BM - 0.25%) -4.106% (BM - 3.25%)
100,000.01 + -3.106% (BM - 2.25%) -4.106% (BM - 3.25%)
EUR 0 - 100,000 -0.819% (BM - 0.25%) -3.819% (BM - 3.25%)
100,000.01+ -2.819% (BM - 2.25%) -3.819% (BM - 3.25%)
GBP 0 - 80,000 0% 0%
80,000.01+ 0% (BM - 2.25%) 0% (BM - 3.25%)
HKD 0 - 780,000 0% 0%
780,000.01 0% (BM - 2.25%) 0% (BM - 3.25%)
MXN 0 - 1,900,000 0% 0%
1,900,000.01+ 2.859% (BM - 4%) 1.859% (BM - 5%)
SEK 0 - 850,000 -0.423% (BM - 0.25%) -3.423% (BM - 3.25%)
850,000.01+ -2.423% (BM - 2.25%) -3.423% (BM - 3.25%)
Disclosures
• Costs for position borrowing of stocks with special considerations (for example hard to borrow instruments) are usually higher than for normal availability stocks. These additional costs will be passed on in the form of lower short stock credit interest. Please note that this may lead to a net debit short stock credit interest in the event that the costs to borrow exceed the interest earned. In order to view the indicative short stock interest rates for a specific stock, IBKR recommends that clients use the Short Stock (SLB) Availability Tool in the Support > Tools menu in Account Management.