IB and interest charge

osho67

Well-known member
407 3
I have tried to look IB front page to find out the answer why IB charges me interest every month. I buy some shares and there is enough money to cover the purchase . Is this because IB only debits margin to my account leaving me more money to buy some other shares. I would not like to pay interest to IB and I would prefer my a/c is fully debited with the purchase of the equity.Please comment and help. Thanks
 

TheBramble

Legendary member
8,394 1,170
Are you shorting stocks as well? If you are and are holding, you'll be charged the interest on 'borrowing' those stocks.
 

JonnyT

Senior member
2,560 22
I'm still awaiting a reply to trades being lost on Globex from two weeks ago so I wouldn't hold your breath.

Seriously considering moving to Tradestation 7.2

JonnyT
 

osho67

Well-known member
407 3
I am not shorting stocks. I buy 100 of stock and write a call option against those stocks. I have not done any other activity.
 

wheezergeezer

Well-known member
368 8
Who is better IB or Tradestation, I ask because I want to open an account and trade in the US, as you guys are far more experienced that me, I would appreciate your views , or am I splitting hairs.............thanks
 

osho67

Well-known member
407 3
I have noticed IB is not deducting full value of my purchases. I am only being debited margin amount and more funds are at my disposal to spend. Is this because this is a margin account as opposed to a cash account?This will explain the interest charge.
 

rog1111

Established member
673 10
osho67 said:
I have tried to look IB front page to find out the answer why IB charges me interest every month. I buy some shares and there is enough money to cover the purchase . Is this because IB only debits margin to my account leaving me more money to buy some other shares. I would not like to pay interest to IB and I would prefer my a/c is fully debited with the purchase of the equity.Please comment and help. Thanks

osho, for IB problems, I usually try the IB website's "Live help" person first, often much quicker then emailing, as usually (but not always) they're quite clued up.
GL

rog1111
 

sidinuk

Established member
624 5
Is your base currency GBP but you are buying US shares? If so, everytime you deal the margin will be deducted from what ever US$ you have in your account, if there aren't enough then you will effectively be overdrawn in US$ even though you have enough GBP to cover the margin.
 

osho67

Well-known member
407 3
Yes my account is GBP account and I donot have any $ balance( I have only remitted GBP)I have ssen my buying has exceeded the amount I have sent to them and still I have available funds at my disposal as IB is only deducting margin and not full value. So in effect I am overdrawn and I am being charged interest.
 

idetkov

Member
56 1
Sorry, I forgot to mention that alternatively you can buy USD from IB and remove your interest charges. Of course, you will start to depend on GBP/USD rate in this case.
 

peto

Established member
964 107
If idetkov and sidnuk are right then you could buy dollars on their own 'IDEAL' exchange and presumably solve the problem. I have a GBP account but my account shows separate balances for all the currencies I have traded in
 
 
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