Your account may list both short and long balances as a result of the following:
- You maintain balances in multiple currencies - the IBKR Universal account allows you to hold cash balances and positions denominated in multiple currencies. Account holders maintaining a margin account are eligible to purchase a security denominated in a particular currency and borrow the funds necessary to settle that transaction with a loan secured by cash and/or securities denominated in another currency. Similarly, with a margin account, one may initiate a withdrawal of fund in a currency other than that they hold, and secure that loan with funds denominated in another currency. Both of these are instances where the account holder may hold both a long and short balance may be eligible to earn interest on the long balance and will be obligated to pay interest on the short balance.
- You are trading both securities and commodities - the IBKR Universal account allows you to trade both securities and commodities, however, to comply with the separate US regulations applicable to each of those product types, positions and margin collateral are maintained in separate segments or sub-accounts. This allows for borrowing in one account which cannot be offset by a long cash balance in the other.
- Trade Date vs. Settlement Date - when you purchase a stock, payment through the clearinghouse is generally not made until 2 business days thereafter. For purposes of determining margin compliance and trading, IBKR will display balances on a Trade Date basis (i.e., assumes settlement has completed) and will display cash balances on both a Trade Date and Settlement Date basis. This differentiation is necessary as interest debits and credits are determined using Settlement Date cash balances. If you have trade activity which has not yet settled it is possible to have a short Trade Date balance and long Settlement Date balance or vice versa.
- Dividends and Interest Charges - if you hold stocks that pay dividends in a different currency, these will be credited to your account in that currency. Interest on existing negative balances is calculated daily and charged monthly, which can result in or increase negative balances.
- Currency Conversions and Transfers - when you perform currency conversions or transfers in a margin account, transactions are not automatically converted to the base currency. This can result in negative balances in currencies you did not originally hold.