Effective 29 April 2022, Interactive Brokers1 will implement a new methodology to measure margin requirements for accounts holding a concentrated position in a low cap stock(s), including all holdings under the same issuer.

New Methodology

Currently, margin requirements for accounts holding a concentrated position in a low cap stock are determined using a proprietary Value at Risk (VAR) methodology, which calculates the theoretical worst-case loss of the position, given a range of price and implied volatility changes. The price scanning range for a given security is the greater of an individual portfolio’s concentration margin rate and the result of a stress test that simulates a price change reflective of a $500 million decrease in market capitalization.

The new methodology applies the same VAR framework, but Interactive Brokers will apply the greater of the individual concentration margin rate or low cap stress test to each asset.

For example, below are two assets held in a single account, issued by the same issuer with the same value, where the market capitalization of the issuer is $715 million.

• Asset A: Concentration rate is 100%
• Asset B: Concentration rate is 30%

Under the present calculation, the margin requirement for the portfolio would be based on the $500 million decrease in market capitalization, or approximately 70% of the market value of the 2 assets. Under the new concentration methodology, Asset A minimum price scan would remain at 100% and Asset B would increase to 70%, with an effective margin rate of 85%.

Recommended Actions

To evaluate the new change’s full impact on your portfolio and ensure the accounts remains margin compliant, please see KB Article 2957: Risk Navigator: Alternative Margin Calculator, and/or from the margin mode setting in Risk Navigator, select “MARGIN 20220429”.

Accounts that are unable to carry a position under this new margin requirement are subject to liquidations to bring the account into margin compliance. Therefore, please make necessary adjustments to your portfolio to comply with Interactive Brokers’ new policy.

1Euro 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.

Responding to the new development of the Russia-Ukraine conflict and its impacts on the markets in the last 24 hours, Interactive Brokers will implement a new maintenance margin requirement as followed:

All ADR/GDR and ETF instruments with Russian securities as underlying(s) will have the maintenance margin requirement of 100%, effective immediately.

The new maintenance margin requirement will be maintained until further notice.

We strongly recommend that accounts with exposure to mentioned securities to take the necessary steps to ensure margin compliance. Accounts that are not margin compliant are subject to immediate and automated liquidation by Interactive Brokers.

1Euro 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.

In light of the recent geopolitical tensions associated with Russia and to address any associated increased volatility, Interactive Brokers will be implementing an increase in the margin requirements for Russian equity products (stocks, ETFs and/or equity options).

Updated Margins

Trading accounts holding Russian products should expect long and short maintenance margin to be increased to the following levels:

Timeline of Change

The increase will be phased in over a series of daily increments in the period starting from the New York close on February 24. The new temporary margin levels will be maintained until February 28.

Recommended Actions

We strongly recommend that accounts with exposure to mentioned Russian securities to take the necessary steps to ensure margin compliance throughout the implementation schedule. Accounts that are not margin compliant are subject to immediate and automated liquidation by Interactive Brokers.

1Euro 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.

Background

For several years, many central banks around the world have instituted zero to negative interest rates in order to promote their economic growth priorities. When these policies were first implemented, Interactive Brokers1 believed them to be transitional and established its own rate policy for clients to insulate them to some degree from these central bank strategies.

Unfortunately, the zero-negative rate policies appear to remain the prevailing strategy for the foreseeable future. Therefore, Interactive Brokers is adjusting its current negative rate currency policy, which charges a zero percent interest rate on deposited funds from 100K USD/EUR/CHF or equivalent in other currencies.

Updated Policy

Effective September 1, 2021, the thresholds of balances exempt from negative interest will be reduced to the amounts below.

Deposited funds (“credit balances”) in excess of these amounts will be exposed to the prevailing negative rate regimes. We recommended that you review your portfolio’s cash holding and making changes if it is determined necessary.

For a full listing of credit/deposit rates at Euro Pacific Trader, please click here.

1Euro 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.

Effective after the US market close on August 5, 2021, Interactive Brokers1 will begin phasing in a new margin requirement to identify the inherent risk of a portfolio concentrated in three or fewer equity positions.

New Methodology

• Interactive Brokers will continue to calculate the potential loss for each stock (and its derivatives) by conducting the same stress tests currently in place.
• The aggregate projected loss for the top three concentrated stocks (and their derivatives) from the above scenarios will be compared to what would otherwise be the aggregate portfolio margin requirement, and the greater of the two will be the margin requirement for the portfolio. This differs from the current approach, which considers the projected loss from two or fewer equity positions.

The increase will be implemented in a series of gradual steps over a 10-business day period, beginning after the US close on August 5, 2021, and concluding after the US close on August 19, 2021, with the increase to initial margins occurring first.

Recommended Actions

As the margin impact is portfolio-dependent, we recommend that you review the full impact to your account prior to, during and following full implementation.

To evaluate the full impact of this proposed change on your margin requirements, please see KB Article 2957: Risk Navigator: Alternative Margin Calculator and utilize the margin mode setting in Risk Navigator, select “Margin 20210820.”

Accounts that are unable to carry a position under this new margin requirement are subject to liquidations to bring the account into margin compliance. Therefore, please make necessary adjustments to your portfolio to comply with Interactive Brokers’ new policy.

1Euro 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.