Interest Rates
Margin Interest Rates:
Margin account debits will be charged interest on a monthly basis. The rate is based upon the Broker Call (Call Money) Rate*, and varies according to the average debit balance for the month.
| DEBIT BALANCE | INTEREST RATE CHARGED | |
| $0 - $49,999 | 2.00% + 1.75% | (3.75%) |
| $50,000 - $99,999 | 2.00% + 1.00% | (3.00%) |
| $100,000 - $249,999 | 2.00% + 0.50% | (2.50%) |
| $250,000 - $499,999 | 2.00% | (2.00%) |
| $500,000 - $999,999 | 2.00% - 0.50% | (1.50%) |
| $1,000,000 + | 2.00% - 0.75% | (1.25%) |
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| *As of Dec 16th 2008, the broker call rate is 2.00%. This rate is published in financial newspapers. | ||
Short Sale Interest Fees:
For short sales on stocks which are deemed "hard to borrow", there may interest-like fees (known in the industry as "negative rebates") associated with carrying the short position. This interest will accrue from settlement date of the short sale until settlement date of the buy-to-cover, and will be charged daily.
The formula for the interest calculation will be: (Market Value x Rate x # of days) / 360. For example: ($5000 principal x 3% interest rate x 1-day holding period) divided by 360 days = $0.42.
The entry on you History screen/monthly statement will read “(Company Name) STK BORROW FEE (DATE) (CUSIP)”. For example, if you were short GE on June 10th 2011, and it had a fee rate associated with it, the entry would read: General Electric STK BORROW FEE 06/10/2011 369604103 .
If you would like to find out the possible interest rate (if any) for a particular stock, please contact us before entering a short sale order.
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