EURO PACIFIC TRADER NOW AVAILABLE
The Global TradeStation platform is currently undergoing change of technology provider and custodian. Our new brokerage platform, Euro Pacific Trader, has now been released. Apply now through the Euro Pacific eBanking portal
Interest Schedule
Euro Pacific calculates an internal funding rate based on a combination of internationally recognized benchmarks on overnight deposits (ex: Fed funds, LIBOR) and real time market rates as traded, measured, in the interbank short-term currency swap markets, the world’s largest and most liquid market.
While central banks and major money-center banks set and publish reference rates for interest dependent investments, these rates often do not reflect the exact investment costs/opportunities seen in interbank and commercial transactions. Euro Pacific’s interest model starts with the fixing rates and incorporates the dynamic market pricing to produce a midpoint or “Benchmark”.
Around this benchmark, Euro Pacific adds a spread to determine deposit and borrowing rates applicable to client balances in each currency. Spreads are tiered such that larger balances receive more favorable interest treatment by virtue of smaller spreads to the benchmark
Reference Benchmark Rates
Reference Benchmark Rates
Euro Pacific’s benchmark for each currency is the reference rate around which our credit, debit, stock-loan, and other interest rate linked calculations are determined. Euro Pacific uses a combination of internationally recognized interest rate fixings (such as LIBOR, Fed Funds, etc) and dynamic interbank rates determined from foreign exchange and money-markets to calculate an Euro Pacific Reference Benchmark rate.
For more information about Euro Pacific reference benchmark click here.
For information regarding the various benchmark fixings that contribute to the Euro Pacific Reference Benchmark rate click here.
- Benchmark rates are updated as frequently as possible on this page, but due to the frequency of changes in market conditions across many currencies, it is possible the rates below will not reflect the current rate.
- For the most up to date benchmark rates, please visit the Interactive Brokers website.
| CURRENCY | DESCRIPTION | RATE | EFFECTIVE DATE |
|---|---|---|---|
| USD | Reference Benchmark USD | 0.08% | 20220104 |
| USD | Reference Benchmark USD Libor | 0.06% | 20220104 |
| AUD | Reference Benchmark AUD | -0.12% | 20220104 |
| BRL | Reference Benchmark BRL | 9.15% | 20220104 |
| CAD | Reference Benchmark CAD | -0.02% | 20220104 |
| CHF | Reference Benchmark CHF | -0.86% | 20220104 |
| CNH | Reference Benchmark CNH | 6.23% | 20220104 |
| CZK | Reference Benchmark CZK | 2.80% | 20220104 |
| DKK | Reference Benchmark DKK | -0.59% | 20220104 |
| EUR | Reference Benchmark EUR | -0.65% | 20220104 |
| GBP | Reference Benchmark GBP | -0.25% | 20220104 |
| HKD | Reference Benchmark HKD | 0.09% | 20220104 |
| HUF | Reference Benchmark HUF | 3.04% | 20220104 |
| ILS | Reference Benchmark ILS | 0.07% | 20220104 |
| INR | Reference Benchmark INR | 8.70% | 20220104 |
| JPY | Reference Benchmark JPY | -0.15% | 20220104 |
| KRW | Reference Benchmark KRW | 1.00% | 20220104 |
| MXN | Reference Benchmark MXN | 5.69% | 20220104 |
| NOK | Reference Benchmark NOK | 0.80% | 20220104 |
| NZD | Reference Benchmark NZD | -0.20% | 20220104 |
| PLN | Reference Benchmark PLN | 1.10% | 20220104 |
| RUB | Reference Benchmark RUB | 8.28% | 20220104 |
| SEK | Reference Benchmark SEK | -0.24% | 20220104 |
| SGD | Reference Benchmark SGD | 0.20% | 20220104 |
| TRY | Reference Benchmark TRY | 17.59% | 20220104 |
| ZAR | Reference Benchmark ZAR | 6.84% | 20220104 |
Euro Pacific accrues interest on a daily basis and posts actual interest monthly on the third business day of the following month. For detailed examples on how we calculate interest, open the Interest Paid to You and Interest Rates Charged to You on Margin Loan Balances sections on this page.
Interest Paid on Idle Cash Balances
Interest Paid on Idle Cash Balances
Client accounts are eligible to receive credit interest on long settled cash balances in their securities accounts.
Accounts with a Net Asset Value (NAV) of USD 100,000 (or equivalent) or more are paid interest at the full rate for which they are eligible. Accounts with NAV of less than USD 100,000 (or equivalent) receive interest at rates proportional to the size of the account. For example, an account with a NAV of USD 50,000 earns credit interest at a rate equal to one-half the rate paid by Euro Pacific to accounts with a NAV of USD 100,000 or more.
Interest accrues and is payable on a daily basis. Euro Pacific posts the interest payments on a monthly basis on the third business day of the following month.
Euro Pacific uses a blended rate based on the tiers outlined in the table below. The tiers on which interest rates are based are subject to change without prior notification.
For balances held in CHF, DKK, EUR, JPY or SEK, Euro Pacific currently applies an effective negative rate to long balances held. For other currencies in which the benchmark rate plus the interest rate paid is less than zero, the interest paid is 0%.
Higher Interest Rates for Large Cash Balances
We pay interest to clients for credit balances, based upon rates available in the interbank deposit market. For those clients that hold large cash balances in multiple currencies, we offer the ability to take advantage of the Forex Swaps market to potentially earn higher rates. This program is not designed for and would not benefit any client who holds a single-currency long balance. The mechanics behind this program involve the buying of a currency for settlement one day out and the selling of the same currency two days out, the difference in value between the two settlement dates being the interest earned. We automatically keep rolling the swaps until you no longer meet the minimum balance criteria, or you instruct us to halt the program. You must have at least USD $10 million in cash, and US residents must be Eligible Contract Participants (ECP) to enroll in the program.
For more information please contact our swaps desk at [email protected].
Interest Paid to You on Positive (Credit) Cash Balances
BM = Benchmark Rate
| Currency | Tier | Rate Paid if NAV >= USD 100,000 (or equivalent) 1 |
|---|---|---|
| USD | 0 - 10,000 | 0% |
| 10,000.01 + | BM - 1.0% | |
| AUD | All | 0% |
| CAD | All | 0% |
| CHF | 0 - 100,000 | 0% |
| 100,000.01 + | BM - 0.25% | |
| CNH | All | 0% |
| CZK | All | 0% |
| DKK | 0 - 700,000 | 0% |
| 700,000.01 + | BM - 0.25% | |
| EUR | 0 - 100,000 | 0% |
| 100,000.01 + | BM - 0.25% | |
| GBP | All | 0% |
| HKD | 0 - 78,000 | 0% |
| 78,000.01 + | 0% | |
| HUF | 0 - 2,800,000 | 0% |
| 2,800,000.01 + | 0% | |
| ILS | All | 0% |
| INR | All | 0% |
| JPY | 0 - 11,000,000 | 0% |
| 11,000,000.01 + | BM - 0.25% | |
| KRW | All | 0% |
| MXN | All | 0% |
| NOK | All | 0% |
| NZD | All | 0% |
| PLN | All | 0% |
| RUB | All | 0% |
| SEK | 0 - 850,000 | 0% |
| 850,000.01 + | BM - 0.25% | |
| SGD | All | 0% |
| ZAR | All | 0% |
Interest Charged on Margin Loans
Interest Charged on Margin Loans
When calculating rates, keep in mind that Euro Pacific uses a blended rate based on the tiers below. For example, for a balance over 1,000,000 USD, the first 100,000 is charged at the Tier I rate, the next 900,000 at the Tier II rate, etc. When determining the quoted spread, Euro Pacific will use the set benchmark rate or a benchmark rate of 0 for all benchmark rates less than 0.
Euro Pacific accrues interest on a daily basis and posts actual interest monthly on the third business day of the following month.
The tiers on which interest is based may change from time to time without prior notification to clients. Such adjustments are done periodically to adjust for changes in currency rates.
Total Interest = Benchmark Rate + Premium below
| CURRENCY | TIER | PREMIUM* |
|---|---|---|
| USD | 0 ≤ 100,000 | 2.50% |
| 100,000 ≤ 1,000,000 | 2% | |
| 1,000,000 ≤ 50,000,000 | 1.75% | |
| 50,000,000 ≤ 200,000,000 | 1.50% (see note below) | |
| > 200,000,000 | 1.50% (see note below) | |
| AUD | 0 ≤ 140,000 | 2.50% |
| 140,000 ≤ 1,400,000 | 2% | |
| 1,400,000 ≤ 70,000,000 | 1.75% | |
| 70,000,000 ≤ 280,000,000 | 1.50% (see note below) | |
| > 280,000,000 | 1.50% (see note below) | |
| CAD | 0 ≤ 130,000 | 2.50% |
| 130,000 ≤ 1,300,000 | 2% | |
| 1,300,000 ≤ 64,000,000 | 1.75% | |
| 64,000,000 ≤ 260,000,000 | 1.50% (see note below) | |
| > 260,000,000 | 1.50% (see note below) | |
| CHF | 0 ≤ 90,000 | 2.50% |
| 90,000 ≤ 900,000 | 2% | |
| 900,000 ≤ 46,000,000 | 1.75% | |
| 46,000,000 ≤ 180,000,000 | 1.50% (see note below) | |
| > 180,000,000 | 1.50% (see note below) | |
| CNH | 0 ≤ 650,000 | 5% |
| 650,000 ≤ 6,500,000 | 4% | |
| 6,500,000 ≤ 300,000,000 | 3.50% | |
| > 300,000,000 | 3% (see note below) | |
| CZK | 0 ≤ 400,000,000 | 4% |
| > 400,000,000 | 4% (see note below) | |
| DKK | 0 ≤ 120,000,000 | 4% |
| > 120,000,000 | 4% | |
| EUR | 0 ≤ 90,000 | 2.50% |
| 90,000 ≤ 900,000 | 2% | |
| 900,000 ≤ 44,000,000 | 1.75% | |
| 44,000,000 ≤ 180,000,000 | 1.50% (see note below) | |
| > 180,000,000 | 1.50% (see note below) | |
| GBP | 0 ≤ 80,000 | 2.50% |
| 80,000 ≤ 800,000 | 2% | |
| 800,000 ≤ 38,000,000 | 1.75% | |
| 38,000,000 ≤ 150,000,000 | 1.50% (see note below) | |
| > 150,000,000 | 1.50% (see note below) | |
| HKD | 0 ≤ 780,000 | 3.50% |
| 780,000 ≤ 7,800,000 | 3% | |
| 7,800,000 ≤ 780,000,000 | 2.50% | |
| > 780,000,000 | 2.50% (see note below) | |
| HUF | 0 ≤ 4,500,000,000 | 6% |
| > 4,500,000,000 | 6% (see note below) | |
| ILS | 0 ≤ 80,000,000 | 6% |
| > 80,000,000 | 6% (see note below) | |
| INR | All | 4% |
| JPY | 0 ≤ 11,000,000 | 2.50% |
| 11,000,000 ≤ 114,000,000 | 2% | |
| 114,000,000 ≤ 5,700,000,000 | 1.75% | |
| 5,700,000,000 ≤ 23,000,000,000 | 1.50% (see note below) | |
| > 23,000,000,000 | 1.50% (see note below) | |
| KRW | 0 ≤ 120,000,000 | 3% |
| 120,000,000 ≤ 1,200,000,000 | 2.50% | |
| 1,200,000,000 ≤ 24,000,000,000 | 2% | |
| > 24,000,000,000 | 2% (see note below) | |
| MXN | 0 ≤ 2,000,000 | 4% |
| 2,000,000 ≤ 20,000,000 | 3% | |
| 20,000,000 ≤ 2,000,000,000 | 2.50% | |
| > 2,000,000,000 | 2.50% (see note below) | |
| NOK | 0 ≤ 900,000 | 2.50% |
| 900,000 ≤ 9,000,000 | 2% | |
| 9,000,000 ≤ 450,000,000 | 1.75% | |
| 450,000,000 ≤ 1,800,000,000 | 1.50% (see note below) | |
| > 1,800,000,000 | 1.50% (see note below) | |
| NZD | 0 ≤ 150,000 | 2.50% |
| 150,000 ≤ 1,500,000 | 2% | |
| 1,500,000 ≤ 150,000,000 | 1.75% | |
| > 150,000,000 | 1.75% (see note below) | |
| PLN | 0 ≤ 70,000,000 | 4% |
| > 70,000,000 | 5% (see note below) | |
| RUB | 0 ≤ 660,000,000 | 6% |
| > 660,000,000 | 6% (see note below) | |
| SEK | 0 ≤ 900,000 | 2.50% |
| 900,000 ≤ 9,100,000 | 2% | |
| 9,100,000 ≤ 454,000,000 | 1.75% | |
| 454,000,000 ≤ 1,820,000,000 | 1.50% (see note below) | |
| > 1,820,000,000 | 1.50% (see note below) | |
| SGD | 0 ≤ 140,000 | 2.50% |
| 140,000 ≤ 1,400,000 | 2% | |
| 1,400,000 ≤ 68,000,000 | 1.75% | |
| 68,000,000 ≤ 270,000,000 | 1.50% (see note below) | |
| > 270,000,000 | 1.50% (see note below) | |
| TRY | 0 ≤ 90,000,000 | 6% |
| > 90,000,000 | 7% (see note below) | |
| ZAR | 0 ≤ 1,500,000 | 2.50% |
| 1,500,000 ≤ 15,000,000 | 2% | |
| 15,000,000 ≤ 1,500,000,000 | 1.75% | |
| > 1,500,000,000 | 1.75% (see note below) |
*To determine the total interest charged, please add the Premium to the Benchmark Rate (BM)
Note: May be subject to a 1% surcharge applied to the spread if financing is not pre-arranged.
- Accounts with a NAV of less than USD 100,000 (or equivalent) will be paid at a rate proportional to accounts with a NAV of USD 100,000 (or equivalent) or more. The proportion is determined by the ratio of the account’s NAV to USD 100,000 (or equivalent).
- Costs for position borrowing of stocks with special considerations (for example hard to borrow instruments) are usually higher than for normal availability stocks. These additional costs will be passed on in the form of lower short stock credit interest. Please note that this may lead to a net debit short stock credit interest in the event that the costs to borrow exceed the interest earned. In order to view the indicative short stock interest rates for a specific stock, Euro Pacific recommends that clients use the Short Stock (SLB) Availability Tool in the Support > Tools menu in Account Management.
Calculations
Euro Pacific Securities follows the steps listed in the Calculations section below to calculate the daily interest payable or receivable on cash balances. Euro Pacific will combine, where possible, the balances held across multiple account segments of the Integrated Investment Account; however balances across multiple Euro Pacific accounts will not be consolidated.
Calculations
Step 1
At the end of every day, Euro Pacific will obtain the following balances in each currency:
- Ending Settled Cash balance in the securities account segment
- Ending Settled Cash balance in the commodities account segment
- Collateral balance for settled short stock positions
- Ending Settled Cash balance in the IB-UKL segment
- Commodity risk margin requirement
- AdjustmentForSecuritiesDeficit
The cash balances are reported on the Daily Statement under Ending Settled Cash. The commodity risk margin requirement is the Maintenance Margin Requirement as reported on the daily Margin Report minus the total commodity option value. The AdjustmentForSecuritiesDeficit is calculated as follows:
Minimum(-Minimum(EndingSettledCash_Securities + EndingSettledCash_IBUKL,0), EndingSettledCash_Commodities – CommodityRiskMargin)
The purpose of the AdjustmentForSecuritiesDeficit is to determine the value of the excess commodities funds which will be used to offset negative balances in the securities and IBUKL segments.
The collateral balance per short stock is calculated by multiplying the prior day’s closing price by an adjustment factor based on the currency, rounding this value up, then multiplying by the number of shares.
For example, the collateral balance on a USD-denominated security would be:
Collateral Balance = (stock A prior day closing price x 102%, rounded up to the nearest 1.00) x (number of shares stock A) + (stock B prior day closing price x 102%, rounded up) x (number of shares stock B)
The adjustments utilized by Euro Pacific are as follows:
| USD-denominated stock – multiply by 102%, round up to nearest 1.00 |
| CAD-denominated stock – multiply by 102%, round up to nearest 1.00 |
| EUR-denominated stock – multiply by 105%, round up to nearest 0.01 |
| CHF-denominated stock – multiply by 105%, round up to nearest 0.01 |
| GBP-denominated stock – multiply by 105%, round up to nearest 0.01 |
| SEK-denominated stock – multiply by 105%, round up to nearest 0.01 |
| AUD-denominated stock – multiply by 105%, round up to nearest 0.01 |
| HKD-denominated stock – multiply by 105%, round up to nearest 0.01 |
Step 2
Euro Pacific will obtain the USD-equivalent Net Asset Value in the account, consolidating the equity across the IBLLC and IBUKL accounts where possible. The Net Asset Value (NAV) is reflected in the daily account statement under the same name.
For the purposes of crediting interest on either long settled cash balances or short stock collateral values, only accounts with NAV exceeding USD 100,000 will be eligible to receive credit interest on long settled cash balances.
For example, if an account holds
- Settled Long Cash 370,000 EUR
- Settled Short Cash (370,000) USD
Calculate the USD-equivalent of the EUR balance = 370,000 x 1.2 = 444,000
Calculate the USD NAV = 444,000 – 370,000 = 74,000
As the account would not meet the USD 100,000 requirement for credit interest, no interest would be paid on the long EUR cash balance. Interest would be debited on the short USD cash balance.
Step 3
Euro Pacific calculates an Adjusted Cash Balance for the Securities and IB-UKL segments as well an Adjusted Cash Balance for the Commodity segment. This is done using the following formula:
AdjustedCashSecurities+IB-UKL= EndingSettledCash_Securities + AdjustmentForSecuritiesDeficit + EndingSettledCash_IBUKL – ShortStockCollateralValue
AdjustedCashCommodities = EndingSettledCash_Commodities – CommodityRiskMargin – AdjustmentForSecuritiesDeficit
Step 4
Euro Pacific will then determine how much of the AdjustedCashSecurities+IB-UKL balance should be applied to each rate tier (see tier tables). Finally, we calculate the interest using the applicable rates (also from the tier tables): 3
No interest will be paid on excess funds in the commodities segment (AdjustmentCashCommodities). In the event negative interest rates apply, interest will be charged on long balances in the commodities segment.
The numberOfDaysInYear are based on industry standards for money market activity.
- 365: AUD, CAD, CNH/CNY, GBP, HKD, KRW, ILS, INR, NZD, RUB, SGD
- 360: USD, EUR, CHF, CZK, JPY, SEK, NOK, DKK, HUF, MXN
| Interest = | ( Balance tier1 * Rate tier1 / numberOfDaysInYear ) |
| ( Balance tier2 * Rate tier2 / numberOfDaysInYear ) | |
| ( Balance tier3 * Rate tier3 / numberOfDaysInYear ) | |
| etc |
Accruals
Accruals will be posted to the applicable account segment as follows:
If the adjusted cash balances of the security, commodity and IB-UKL segments are the same sign (i.e. all positive or all negative), the interest will be paid to the securities and IB-UKL segments on pro-rata basis while no interest will accrue on the commodity balance. If the cash balances of the security and IB-UKL segments are of opposite sign the interest of the Integrated Investment account will accrue to the segment with the higher balance.
The results of the above calculations are booked to a special “Accrued Cash” sub-account, one for each currency. Accrued Cash has the following features and functions:
- FUNDS FOR TRADING: accrued cash is applied to trading balances, both positively and negatively.
- WITHDRAWALS: accrued cash does not affect Settled Cash balances and therefore cannot be withdrawn. Positive accrued cash balances do not increase the available funds for withdrawal. However, negative accrued cash will reduce the funds available for withdrawal. This avoids the problem of having closed accounts with negative balances.
- PATTERN DAY TRADING: accrued cash does not count toward Pattern Day Trading minimum balance requirements.
Each day, the new calculations for accrued interest are added to the cumulative accrued cash balances from the previous day.
Statements: Whenever the balance of accrued cash exceeds $1.00 (or USD equivalent), we will show the accrual on the Daily Statement. Accruals smaller than $1.00 are recorded in the Euro Pacific systems but are not reported on the statements.
Final Posting
At the end of the month, or within the first few days of the following month, Euro Pacific follows these steps:
- Euro Pacific recalculates all the interest amounts using the calculations above. The new calculation is usually identical to the original cash accruals but may vary by small amounts due to corrections in settled balances or rates.
- Euro Pacific determines the cumulative accrued cash for the previous month as the sum of the individual days.
- Euro Pacific reverses this amount in the Accrued Cash sub-account at the beginning of the following month. For example, if the accrued cash balance for July was positive, we apply a debit charge to accrued cash in early August.
- Simultaneously, we book the final interest calculation from Step 1 above to the regular cash account. In effect, Steps 3 and 4 above convert “pending cash” to “actual cash.”
- These transactions 2 are reported on the Monthly Statement.
Trade Date versus Settlement Date (or Value Date)
In most large financial transactions, there is a time delay between the date on which the transaction is agreed to, and the date on which it settles, i.e., when the actual payment occurs. In the case of stocks (for example US stocks) there is a two business day settlement period. If the trade is executed on a Monday, under normal settlement conditions the actual transfer of money occurs on Wednesday. If the trade occurs on Thursday, two business days later crosses the weekend so normal settlement is the following Monday. Exchange and banking holidays the fall within the settlement period will push back the settlement date.
Why is the Settlement Date Important?
Only settled money is considered for interest rate purposes. When one buys stock, one retains the rights to interest on the money until settlement date. Similarly, sellers only start to receive interest beginning on settlement date.
Settlement Dating is generally a minor consideration for stock, option, and future traders. However, due to the large amounts of capital involved, understanding the concept of Settlement Dating is critical to FOREX and fixed income (bond or money market) traders.
- The new accrued cash shown after the above postings may not be zero. The residual balances reflect the continuing accruals for the first days of the current month. For example, if Euro Pacific processes the final interest calculation on August 6, Accrued Cash will still show the activity from August 1 through August 6.
- Interest will not accrue or be paid to the commodity segment of the account. Both credit and debit interest will accrue and pay to/from the securities and IB-UKL segments.
- The calculated interest per tier will be rounded to the nearest 0.01 (or 1 for JPY). Therefore, a calculated interest of USD 0.0051 will be rounded to 0.01.
Risk Warning
- CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
- 65% of retail investor accounts lose money when trading CFDs with Euro Pacific Trader’s custodian, IBKR (UK).
- You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Index CFDs
Contract Interest is calculated daily on all open CFD positions held at the close of the trading session:
Risk Warning
- CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
- 65% of retail investor accounts lose money when trading CFDs with Euro Pacific Trader’s custodian IBKR (UK).
- You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Index CFDs
NOTE: Starting August 1, 2018 an additional spread of 1% will be added to the rates below for clients classified as retail clients under MIFID.
| Currency | Position | Contract Interest Charged/Paid on Open CFD Positions* |
|---|---|---|
| AUD | Long/Short1 | BM +/- 2.5% |
| CHF | Long/Short1 | BM +/- 2.5% |
| EUR | Long/Short1 | BM +/- 2.5% |
| GBP | Long/Short1 | BM +/- 2.5% |
| HKD | Long/Short1 | BM +/- 2.5% |
| JPY | Long/Short1 | BM +/- 2.5% |
| USD | Long/Short1 | BM +/- 2.5% |
Note: *Index CFD interest is charged at a uniform rate of BM +/- 2.5% regardless of balance. Index CFD balances are not included in the determination of the applicable rate for Share CFDs.
The relevant benchmark rate used to calculate the contract interest rates above can be found on the Interest Schedule page. Contract interest rates are determined by Euro Pacific and may be adjusted from time to time at Euro Pacific’s discretion.
Contract interest is always applied in the contract currency of the CFD, and is calculated using the formula:
| Contract Interest = I x UPV x N/360 (365 for GBP) | |
|---|---|
| I = | The Contract Interest rate |
| UPV = | The Underlying Position Value, calculated as the CFD Daily Settlement Price x number of contracts. |
| N = | The number of days for which the contract interest is being calculated. |
- For long open positions, your account will be charged interest. For short open positions, your account will generally be paid interest, except in cases where the contract interest rate is negative. When the rate is negative, your account will be charged interest.
Forex CFDs
Carry interest is calculated daily on all open CFD positions held at the close of the trading session, and is applied as a blended rate based on notional balances as shown below.
Risk Warning
- CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
- 65% of retail investor accounts lose money when trading CFDs with Euro Pacific Trader’s custodian IBKR (UK).
- You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The carry interest for Forex CFDs is based on a currency-pair specific benchmark and a spread. The benchmark is the difference between the Euro Pacific benchmark rates for the two currencies. It is calculated as + BM Base currency – BM Quote currency. For example, April 21, 2016 the GBP benchmark rate was 0.483%, the USD rate was 0.37%. The applicable benchmark rate is:
| Currency Pair | BM Base Currency | BM Quote Currency | Pair BM (Base BM – Quote BM) | |
|---|---|---|---|---|
| GBP.USD | 0.483% | 0.370% |
= |
0.113% |
The applicable customer rate is Pair BM – Euro Pacific spread for long positions, Pair BM + spread for short positions. It is important to note that the long rate is applied as a credit, the short rate as a debit. Consequently for a long position a positive rate means a credit, a negative rate a charge. However for short positions a positive rate means a charge, a negative rate a credit. For example:
| Currency Pair | Position | Pair BM | Euro Pacific Spread | Applicable Customer Rate | |
|---|---|---|---|---|---|
| GBP.USD | Long | 0.113% | -1.00% |
= |
-0.887% |
| GBP.USD | Short | 0.113% | 1.00% |
= |
1.113% |
Interest is calculated on the contract value expressed in the quote currency, and credited or debited in that currency. For example:
| Currency Pair | Position | GBP.USD Close | USD Value | Daily Interest Rate | USD |
|---|---|---|---|---|---|
| GBP.USD | -20,000 | 1.43232 | -28,646.40 | 1.113% | -0.89 |
Forex CFDs*
NOTE: Starting August 1, 2018 an additional spread of 1% will be added to the rates below for clients classified as retail clients under MIFID.
| Balance Cutoffs (in Quote Currency) | Contract Interest Charged/Paid on Open CFD Positions | |||||
|---|---|---|---|---|---|---|
| Currency Pair | Position | Tier I | Tier II | Forex CFDs Below Tier I | Forex CFDs Between Tier I & II | Forex CFDs Above Tier II |
| AUD.CAD | L/S1 | 1300000 | 13000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| AUD.CHF | L/S1 | 1000000 | 10000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| AUD.CNH | L/S1 | 6500000 | 65000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| AUD.HKD | L/S1 | 8000000 | 80000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| AUD.JPY | L/S1 | 110000000 | 1100000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| AUD.NZD | L/S1 | 1300000 | 13000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| AUD.SGD | L/S1 | 1300000 | 13000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| AUD.USD | L/S1 | 1000000 | 10000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| AUD.ZAR | L/S1 | 14000000 | 140000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| CAD.CHF | L/S1 | 1000000 | 10000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| CAD.CNH | L/S1 | 6500000 | 65000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| CAD.HKD | L/S1 | 8000000 | 80000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| CAD.JPY | L/S1 | 110000000 | 1100000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| CHF.CNH | L/S1 | 6500000 | 65000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| CHF.DKK | L/S1 | 6500000 | 65000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| CHF.JPY | L/S1 | 110000000 | 1100000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| CHF.NOK | L/S1 | 8000000 | 80000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| CHF.SEK | L/S1 | 8000000 | 80000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| CHF.ZAR | L/S1 | 14000000 | 140000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| CNH.HKD | L/S1 | 8000000 | 80000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| CNH.JPY | L/S1 | 110000000 | 1100000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| DKK.JPY | L/S1 | 110000000 | 1100000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| DKK.NOK | L/S1 | 8000000 | 80000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| DKK.SEK | L/S1 | 8000000 | 80000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| EUR.AUD | L/S1 | 1300000 | 13000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| EUR.CAD | L/S1 | 1300000 | 13000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| EUR.CHF | L/S1 | 1000000 | 10000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| EUR.CNH | L/S1 | 6500000 | 65000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| EUR.CZK | L/S1 | 25000000 | 250000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| EUR.DKK | L/S1 | 6500000 | 65000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| EUR.GBP | L/S1 | 700000 | 7000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| EUR.HKD | L/S1 | 8000000 | 80000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| EUR.HUF | L/S1 | 280000000 | 2800000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| EUR.ILS | L/S1 | 4000000 | 40000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| EUR.JPY | L/S1 | 110000000 | 1100000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| EUR.MXN | L/S1 | 17000000 | 170000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| EUR.NOK | L/S1 | 8000000 | 80000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| EUR.NZD | L/S1 | 1300000 | 13000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| EUR.PLN | L/S1 | 4000000 | 40000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| EUR.RUB | L/S1 | 70000000 | 700000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| EUR.SEK | L/S1 | 8000000 | 80000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| EUR.SGD | L/S1 | 1300000 | 13000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| EUR.USD | L/S1 | 1000000 | 10000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| EUR.ZAR | L/S1 | 14000000 | 140000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| GBP.AUD | L/S1 | 1300000 | 13000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| GBP.CAD | L/S1 | 1300000 | 13000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| GBP.CHF | L/S1 | 1000000 | 10000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| GBP.CNH | L/S1 | 6500000 | 65000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| GBP.DKK | L/S1 | 6500000 | 65000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| GBP.HKD | L/S1 | 8000000 | 80000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| GBP.JPY | L/S1 | 110000000 | 1100000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| GBP.MXN | L/S1 | 17000000 | 170000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| GBP.NOK | L/S1 | 8000000 | 80000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| GBP.NZD | L/S1 | 1300000 | 13000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| GBP.SEK | L/S1 | 8000000 | 80000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| GBP.USD | L/S1 | 1000000 | 10000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| GBP.ZAR | L/S1 | 14000000 | 140000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| HKD.JPY | L/S1 | 110000000 | 1100000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| MXN.JPY | L/S1 | 110000000 | 1100000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| NOK.JPY | L/S1 | 110000000 | 1100000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| NOK.SEK | L/S1 | 8000000 | 80000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| NZD.CAD | L/S1 | 1300000 | 13000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| NZD.CHF | L/S1 | 1000000 | 10000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| NZD.JPY | L/S1 | 110000000 | 1100000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| NZD.USD | L/S1 | 1000000 | 10000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| SEK.JPY | L/S1 | 110000000 | 1100000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| SGD.CNH | L/S1 | 6500000 | 65000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| SGD.JPY | L/S1 | 110000000 | 1100000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| USD.CAD | L/S1 | 1300000 | 13000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| USD.CHF | L/S1 | 1000000 | 10000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| USD.CNH | L/S1 | 6500000 | 65000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| USD.CZK | L/S1 | 25000000 | 250000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| USD.DKK | L/S1 | 6500000 | 65000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| USD.HKD | L/S1 | 8000000 | 80000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| USD.HUF | L/S1 | 280000000 | 2800000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| USD.ILS | L/S1 | 4000000 | 40000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| USD.JPY | L/S1 | 110000000 | 1100000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| USD.MXN | L/S1 | 17000000 | 170000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| USD.NOK | L/S1 | 8000000 | 80000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| USD.PLN | L/S1 | 4000000 | 40000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| USD.RUB | L/S1 | 70000000 | 700000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| USD.SEK | L/S1 | 8000000 | 80000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| USD.SGD | L/S1 | 1300000 | 13000000 | BM +/-2.00% | BM +/-1.75% | BM +/-1.50% |
| USD.ZAR | L/S1 | 14000000 | 140000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
| ZAR.JPY | L/S1 | 110000000 | 1100000000 | BM +/-2.50% | BM +/-2.25% | BM +/-2.00% |
Note:
* Interest on Forex CFD balances is calculated on a stand-alone contract basis, and not combined or netted with other currency exposures, including Spot FX. Although Euro Pacific does not directly reference swap rates, Euro Pacific reserves the right to apply higher spreads in exceptional market conditions, such as during spikes in swap rates that can occur around fiscal year-ends.
- For Forex CFDs a positive rate will be paid to your account if your position is long, and charged to your account if your position is short. The reverse applies to negative Forex CFD rates.
FX Auto Swap Program
We have created a mechanism for certain clients carrying large forex positions providing superior carry costs when holding positions not closed out intraday. This program is not designed for and would not benefit any client who holds a single-currency long balance. The facility is associated with equal and offsetting positions in the forex market. The design allows clients to benefit from our participation in the interbank forex swaps market, where implied interest rate spreads are typically much narrower than spreads available in the retail deposit market.
As an alternative to our standard charges and payments for multiple large forex balances, we offer an Auto Swap program which allows you to take advantage of efficient interest rates paid in the Tom/Next market. Our Auto Swap program continually defers settlement of a spot forex position by entering offsetting forward positions on each day that the underlying spot position remains open. A long forex position becomes subject to continuous and offsetting short positions in the FX swaps market, where settlement occurs one day, and maturity occurs the next. So long as the forward FX swaps process is performed, the cost of carry associated with the underlying position can be handled more efficiently.
The service is freely available only for gross FX positions in excess of $10 million USD or currency equivalent. We offer the Automatic FX Swaps service on a commission-free basis and do not charge any markup on the program. Legal US residents need to be an Eligible Contract Participant (ECP) and be in the possession of an LEI number (legal identity identifier). We cannot guarantee a client’s inclusion in the program and all inquiries require compliance approval prior to becoming active. To enroll in the program or for more information email [email protected].
Calculating the Cost of Borrowing Stock at Euro Pacific
There are two factors for daily cost/revenues associated with short selling of stocks and bonds at Euro Pacific:
- Borrow Fee
- Short Sale Proceeds interest paid to you by Euro Pacific
Example 1: An Easy to Borrow or General Collateral Stock
Sell Short 100 AAPL
Stock Borrow Fee
EPT shows the following data for AAPL. The Fee rate* column reflects the Borrow Fee the account will be charged and shown on the account statement.
*EPT Fee rates are indicative intraday and may change due to market conditions between trade execution and settlement.
Statement
Value Date
Rates are based on a one-day look-back. The statement above is as of 6/21/2017 with a value date of 6/20/2017. That means the fee is being charged for holding the stock over market close on 6/20/2017.
Price
This is the cash collateral mark used to calculate interest. To see more information on collateral marks and how they are calculated, please see this page: Short Sale > Collateral
Value
Collateral cash value.
Fee Rate (%)
The annualized percentage borrow fee the account is charged.
Borrow Fee
The cash amount the account will be charged to borrow AAPL for 6/20/2017.
Short Sale Proceeds Interest
Euro Pacific pays interest on Short Sale Proceeds based on the following schedule, calculated on the total short balance of the account.
The Short Sale Proceeds Interest rate that Euro Pacific would pay an account with a short balance of $5,000,000 is 0.628% (assuming the benchmark is 1.16%), computed as a weighted average of the tiers.
The weighted average rate can be computed on the calculator here.
Net Cost
The net cost/revenue to short AAPL for an account with $5,000,000 in short balances is a credit of 0.378%, or $0.15 per day, as illustrated in this chart:
Example 2: A Hard to Borrow Stock
Sell Short 100 of SNAP
EPT shows a Fee rate of 50.19%
Statement
Net Cost
Taking into account the Weighted Average Short Sale Proceeds Interest on a balance of $5,000,000 (similar to the AAPL example above) of 0.628%, the net borrow cost/revenue is -49.56%, or a debit of $2.48 per day.
Interest Paid to You on Short Sale Proceeds Cash Balances
For the purposes of crediting interest on cash equal to short stock collateral values, only accounts with Net Asset Value (NAV) exceeding USD 100,000 will be eligible to receive credit interest on these cash balances.
BM = Benchmark Rate
| Currency | Tier | Rate Paid |
|---|---|---|
| USD | 0 - 100,000 | 0% |
| 100,000.01 - 1,000,000 | BM - 1.75% | |
| 1,000,000.01 - 3,000,000 | BM - 1.5% | |
| 3,000,000.01 + | BM - 1.25% | |
| AUD | All | 0% |
| CAD | All | 0% |
| CHF | 0 - 100,000 | BM - 0.25% |
| 100,000.01 + | BM - 2.25% | |
| EUR | 0 - 100,000 | BM - 0.25% |
| 100,000.01+ | BM - 2.25% | |
| GBP | All | 0% |
| HKD | All | 0% |
| MXN | All | 0% |
| SEK | 0 - 850,000 | BM - 0.25% |
| 850,000.01+ | BM - 2.25% |
- Costs for position borrowing of stocks with special considerations (for example hard to borrow instruments) are usually higher than for normal availability stocks. These additional costs will be passed on in the form of lower short stock credit interest. Please note that this may lead to a net debit short stock credit interest in the event that the costs to borrow exceed the interest earned. In order to view the indicative short stock interest rates for a specific stock, Euro Pacific recommends that clients use the Short Stock (SLB) Availability Tool in the Support > Tools menu in Account Management.
Euro Pacific Trader is offered by Euro Pacific Securities Inc. (“Euro Pacific Securities”), as an Introducing Broker to Interactive Brokers LLC. Interactive Brokers LLC is the custodian, technology provider, and clearing broker to all transactions executed through Euro Pacific Trader and thus the rates, conditions, and examples shown on this site may be subject to change and differ from what is displayed on Euro Pacific Trader. The rates, conditions, and examples on this site are provided on a best-efforts basis and should not be taken as final.
Euro Pacific Securities will not be held responsible for pricing and conditional discrepancies that may arise in the normal course of offering Euro Pacific Trader. Customers should always review and rely on the conditions that are shown directly on Euro Pacific Trader, and it is the responsibility of all customers to carefully review the conditions of every action before approving execution on Euro Pacific Trader.
Interactive Brokers LLC is a registered Broker-Dealer, Futures Commission Merchant and Forex Dealer Member, regulated by the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), and is a member of the Financial Industry Regulatory Authority (FINRA) and several other self-regulatory organizations. Interactive Brokers LLC does not endorse or recommend any introducing brokers, third-party financial advisors or hedge funds, including Euro Pacific Securities. Interactive Brokers LLC provides execution and clearing services to customers. None of the information contained herein constitutes a recommendation, offer, or solicitation of an offer by Interactive Brokers LLC to buy, sell or hold any security, financial product or instrument or to engage in any specific investment strategy. Interactive Brokers LLC makes no representation, and assumes no liability to the accuracy or completeness of the information provided on this website.For more information regarding Interactive Brokers, please visit www.interactivebrokers.com.