Margin Requirements

Margin Financing Charge

---

Interactive Brokers may deposit cash to cover margin and liquidity buffer requirements for positions held at exchanges globally with clearing houses or clearing brokers. The interest earned on that cash may be less than what is earned on other investments. To account for this difference, Interactive Brokers may apply a Margin Financing Charge. This is a monthly charge in the currency of the traded contract that accrues on overnight margin balances for those contracts.

If you have sufficient cash to cover the margin balance:

Rate = Currency’s credit interest rate minus the effective rate Interactive Brokers earns on margin and liquidity buffer deposits

For any remaining margin balance:

Rate = Standard currency benchmark rate minus the effective rate Interactive Brokers earns on margin and liquidity buffer deposits

Exposure Fee for High Risk Accounts

---

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:

• IBKR calculates the Exposure Fee at its discretion. The calculation may be subject to change without notice and is based on a proprietary algorithm designed to determine the potential exposure to the firm that an account presents.
• The Exposure Fee may change each day based on market movements, changes in the account's portfolio, and changes in the formulas and algorithms that IBKR uses to determine the potential risk of the account.
• The Exposure Fee is calculated daily and deducted from affected accounts on the following trading day. Accounts subject to the exposure fee should maintain excess equity to avoid a margin deficiency. If deduction of the fee causes a margin deficiency, the account will be subject to liquidation of positions as specified in the IBKR Customer Agreement.
• Accounts that are subject to both an overnight position (Inventory) fee and an Exposure Fee will be charged the greater of the two fees.
• The Exposure Fee is not a form of insurance. The client is still liable to IBKR to satisfy any account debt or deficit. Whether an account has been assessed and has paid an Exposure Fee does not relieve the account of any liability. Nor will the debt or deficit to IBKR be offset or reduced by the amount of any exposure fees to which the account may have been assessed at any time.

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:

• Adding additional equity will improve the risk profile of an account and may reduce or eliminate the Exposure Fee.
• Holding one or more highly concentrated single position(s) generally expose an account to significant risk exposure and, hence, increases the likelihood of an account being assessed an Exposure Fee. Managing risk through diversification and hedging may reduce the risk and reduce or eliminate the Exposure Fee.
• Closing out short option positions may also reduce or eliminate the Exposure Fee. Testing has indicated that short positions in low-priced options generate the largest exposures relative to the amount of capital.

Additional Tools Available to Accounts

• IBKR provides an Exposure Fee Calculation Report in the IBKR Client Portal, which provides details regarding the Fee and examples of hypothetical adjustments to existing position, which if implemented are projected to reduce the Fee given information available at that time. Please see FAQs.
• Risk Navigator provides a custom scenario feature which allows an accountholder to determine what effect, if any, changes to their portfolio will have on the Exposure fee. Please see Knowledge Base.
• Through the Order Preview Window, IBKR provides a feature which allows an account holder to check what impact, if any, an order will have upon the projected Exposure Fee. Please see Knowledge Base.

---