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 Charges:
For short sales on stocks which are deemed "hard to borrow" (HTB), there may be a carrying charge in the form of an annual interest rate. 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) HTB FEE (CUSIP) (DATE)”. For example, if you are short GE, and it currently has a fee rate associated with it, the entry would read: General Electric HTB FEE 369604103 08/10/2010.
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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