Interactive Brokers may deposit cash to cover margin requirements for positions held in Hong Kong Futures Exchange (HKFE) or Hong Kong Stock Exchange (SEHK) contracts. The interest earned on that cash may be less than what is earned on other investments. To account for this difference, Interactive Brokers computes a Margin Financing Charge. This is a monthly charge in HKD that accrues on overnight HKFE and SEHK margin balances. There is no charge to the extent that an account holds sufficient HKD cash to cover the margin balance. The remaining margin balance, if any, is charged at a rate equal to the difference between the standard HKD benchmark rate and the rate that Interactive Brokers earns on margin deposits.
Interactive Brokers calculates and charges a daily "Exposure Fee" to customer accounts that are deemed to have significant risk exposure. The charge for such accounts is based on the results of stress tests performed to determine exposure to a series of prices changes and to identify accounts that, while margin compliant, have potential exposure that exceeds the account's equity were these hypothetical scenarios to occur.
Exposure Fees apply only to a small percentage of accounts with unusually risky positions. Most accounts are not subject to the fee, based upon recent studies. The Exposure Fee differs from a margin requirement as the amount of the exposure fee is deducted from the account's cash balance on a daily basis. Please note that the exposure fee is not insurance against losses in an account, and a client remains liable to Interactive Brokers for any debt or deficit in an account, regardless of whether an exposure fee has been paid at any point.
Each day, as part of its risk management policy, IBKR simulates thousands of profit and loss scenarios for client portfolios based upon a comprehensive set of sector-based market scenarios for all pre-defined primary risk factors. Following that simulation, all other product(s) in the portfolio are adjusted based upon their respective correlation. These market scenarios simulate events such as price changes in the underlying, both up and down, along with implied volatility shifts in portfolios, including options positions. IBKR calculates an Exposure Fee for the account based on the potential exposure in the event that these projected scenarios occur.
The Exposure Fee is calculated on all calendar days and is charged to the account at the end of the following trading day. The exposure fee charge on Monday's activity statement reflects the charges for Friday, Saturday and Sunday. Exposure Fee calculation periods which include a holiday are determined in the same manner as that of a weekend. The fee is calculated on the holiday and charged at the end of the next trading day. The results of the Exposure Analysis and resulting Exposure Fee are made available for each account in the IBKR Client Portal
Please note the following:
The Exposure Fee is calculated for all assets in the entire portfolio.
If you wish to avoid being charged an Exposure Fee, please consider the following:
Additional Tools Available to Accounts