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Capital Markets

Securities Margin Trading Access

Buying on a margin

Do you want to be able to buy securities with money that you’ve borrowed? We call that “buying on a margin.” It allows you to invest in a greater number of securities than you could with just cash, thus diversifying your portfolio and mitigating your risk. Plus, the loans are at low USD interest rates.

Benefits:

  • Enjoy repayment flexibility.
  • No cost to neither borrow nor repay early.

 

Important note:

For securities, the definition of margin includes 3 important concepts:

  • The Margin Loan - the amount of money that an investor borrows from his broker to buy securities.
  • The Margin Deposit - the amount of equity contributed by the investor toward the purchase of securities in a margin account.
  • The Margin Requirement - the minimum amount that a customer must deposit and it is commonly expressed as a percent of the current market value.

 

The Margin Deposit can be greater than or equal to the Margin Requirement. We can express this as an equation:

                                    Margin Loan + Margin Deposit = Market Value of Security

                                                Margin Deposit >= Margin Requirement

 

How does it work?

  • Interactive Brokers uses real-time margining to allow you to see your trading risk at any moment of the day, including new and past trades. It enforces initial margin requirements at the end of the day, with real-time liquidation of positions instead of delayed margin calls.
  • This lets JMMB Interactive maintain low-interest costs, as the cost of credit losses does not have to be spread to customers in the form of higher costs.

Margin Pricing Structure

Minimum account size: US $100,000.00*

  • When calculating rates, IB 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.
  • IB 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.

 

Currency

Loan Amount

Rate Charged

USD

0 - 100,000

4.16% (BM + 3.5%)

 

100,000.01 - 1,000,000

3.66% (BM + 3%)

 

1,000,000.01 - 3,000,000

3.16% (BM + 2.5%)

 

3,000,000.01 - 200,000,000

2.91% (BM + 2.25%)

 

200,000,000.01 +

2.91% (BM + 2.25%)

BM = Benchmark rate. The BM is the US Dollar Fed Funds Effective rate which as at January 5th was 0.66%

*Special terms and conditions apply

 

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