IB - Interest on Negative Balances

Sharky

Sharky

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I've received today an email from a member warning about the potential for being charged interest on negative balances. He/she preferred to keep their identity private, so am sharing this information with you directly...

I use IB and wondered why my capital kept drifting lower even over christmas when i was not trading, this was a large sum and as a independant trader (not with a big bank etc ) one i can ill afford. I spoke with IB and its was not until i put them under considerable pressure they informed me that whilst my account was good for funds and trading etc that previous loss trades created a negative figure on certain currencies (shown in your market value box) wait for it, this was the big one and i as are all of you being charged for this negative figure on a daily basis if you do not personally and manually clear it down with your funds.

I have spoken to a least three other traders who are not aware of this, we all thought the charges were due to currency fluctuations but the person at IB said and i quote "you are paying interest on that negative balance".

now maybe its me but im no ludite and would have picked up on this, but why does this not clear down manually at the end of each day. I have now cleared the negative balances which you can do yourself and all is now stable
Click to expand...

Note I've edited the email for brevity and to keep the identity of the person anonymous.
 
Sharky said:
I've received today an email from a member warning about the potential for being charged interest on negative balances. He/she preferred to keep their identity private, so am sharing this information with you directly...



Note I've edited the email for brevity and to keep the identity of the person anonymous.
Click to expand...

To cover this inevitable eventuality, can someone explain what I need to do to clear the negative balance. Do I just buy $x, where x is my negative balance?

Many thanks

pogle
 
Yes pogle.

If your account is in GBP and you have a negative $ balance from, say, trading US futures, then do this:

In the underlying column type USD. Select CASH. Select IDEAL GBP (third row down). Click in the ask column to buy. Change order type to limit. Enter quantity of $ to buy and the limit price (the current offer for immediate fill) and you're off.
 
I am lost. Evewry month I see IB debits interest to me on my dollar negative balance and credits interest on my positive GBP balance. As my credit is more than my debit , I donot bother. Am I right or should I clear my debit dollar balance. Please comment.Thanks
 
Always clear the negative balances osho as they will cost you money. Credit interest will be less than debit interest, almost certainly.
 
frugi said:
Yes pogle.

If your account is in GBP and you have a negative $ balance from, say, trading US futures, then do this:

In the underlying column type USD. Select CASH. Select IDEAL GBP (third row down). Click in the ask column to buy. Change order type to limit. Enter quantity of $ to buy and the limit price (the current offer for immediate fill) and you're off.
Click to expand...

Many thanks frugi

pogle
 
Dear Frugi
I donot understand why credit interest will be less than debit interest? In my case I sell covered calls or naked puts and receive premium income, which I think should be in dollars and as a result my debit balance on dollars reduces all the time. By the way where can I find both the balance figures- GBP and US dollars on my IB account? Thanks
 
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