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Interest Paid to You on Short Sale Proceeds Cash Balances Examples

Examples

For questions about interest rate issues, please use the Inquiry Ticket or Chat system located in the Support menu of Account Management.

For all below examples assume benchmark rates as follows:


Benchmark (BM) Rate
US Dollar Fed Funds Effective 1.00%
EONIA (Euro Overnight Index Average) 2.080%
GBP LIBOR (Overnight Rate) 4.439%



Example 1 - Interest Paid To You on Short Sale Proceeds


When you sell stock short and receive cash proceeds, we'll pay you daily interest on those proceeds as follows:


Statement Reflects
USD Securities Commodities UKL Total
Short Sales Collateral 1,500,000 0 0 1,500,000
Excess Cash 150,000 0 100,000 250,000
Ending Settled Cash 1,650,000 0 100,000 1,750,000

Calculate interest on short stock collateral value 1,500,000
Tier Balance Cash Interest Calculation
< 100,000 100,000 0.00 No payment on balances < 100,000
100,000 - 1,000,000 900,000 0.00 1 [900,000 x (1.00%-1.25%)/360]
1,000,000 - 3,000,000 500,000 6.94 [500,000 x (1.00%-0.50%)/360]
Short credit interest received 6.94

Calculate interest on combined Integrated Investment account excess cash balance 250,000
Tier Balance Cash Interest Calculation
< 10,000 10,000 0.00 (10,000 x 0/360)
10,000 - 100,000 90,000 1.25 [90,000 x (1.00%-0.50%)/360]
> 100,000 150,000 3.13 [150,000 x (1.00%-0.25%)/360]
Credit interest received (securities) 2.63 (4.38 x 150,000/250,000)
Credit interest received (UKL) 1.75 (4.38 x 100,000/250,000)



Example 2 - Interest Paid to You on Short Sale Cash Proceeds and Excess Cash in All Account Segments


Statement Reflects
EUR Securities Commodities UKL Total
Short Sales Collateral 70,000 0 0 70,000
Excess Cash 5,000 25,000 15,000 45,000
Ending Settled Cash 75,000 25,000 15,000 115,000
Commodity Maintenance Margin 0
Commodity Option Value 0

Calculate interest on short stock collateral value 70,000
Tier Balance Cash Interest Calculation
< 80,000 70,000 0.00 (70,000 x 0/360)
> 80,000 0.00 0.00
Short credit interest received 0.00

Calculate interest on combined Integrated Investment account balance 45,000
Tier Balance Cash Interest Calculation
< 7,500 7,500 0.00 (7,500 x 0/360)
> 7,500 37,500 1.65 [37,500 x (2.08%-0.50%)/360]
Credit interest received (securities) 1.10 (1.10 x 30,000/45,000)
Credit interest received (UKL) 0.55 (1.10 x 30,000/45,000)



Example 3 - Interest Paid to You on Short Sale Cash Proceeds and Interest Charged to You on a Debit Integrated Investment Account Balance


In this example, you have securities short sale cash proceeds, and an Excess Cash (credit) balance in your Commodities account and UKL account, but you also have a negative (debit) balance from borrowed cash. We'll charge you daily interest on the debit balance and pay you daily interest on the credit balance as follows:


Statement Reflects
USD Securities Commodities UKL Total
Short Sales Collateral 680,000 0 0 680,000
Borrowed Cash (180,000) 0 0 (180,000)
Excess Cash 0 120,000 30,000 150,000
Ending Settled Cash 500,000 120,000 30,000 650,000
Commodity Maintenance Margin 0
Commodity Option Value 0

Calculate interest on short stock value 680,000
Tier Balance Cash Interest Calculation
< 100,000 100,000 0.00 (100,000 x 0/360)
100,000 -1,000,000 580,000 0.00 1 [580,000 x (1.00%-1.25%)/360]
1M -3M 0.00 0.00
> 3M 0.00 0.00
Short credit interest received 0.00

Calculate interest on combined Integrated Investment account balance -30,000
Tier Balance Cash Interest Calculation
< 100,000 30,000 2.08 [30,000 x (1.00% + 1.50%)/360]
100,000 - 1,000,000 0.00 0.00
1M – 3M 0.00 0.00
> 3M 0.00 0.00
Debit interest charged 2.08
Credit Interest paid (UKL) 0.00 No credit interest will be paid
  1. With the exception of CHF, CZK, DKK, EUR, JPY and SEK, if the benchmark rate plus the interest rate paid is less than 0 then the interest paid will be 0%. For balances held in CHF, CZK, DKK, EUR, JPY or SEK IB will apply an effective negative rate.

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