interest paid on cash balances with interactive brokers

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1pyramidtrader

with rates going up a bit, i was wondering if anyone on here knew anything about interest paid by IB on cash balances. I have about 200K in the account that i uses to support option credit spreads. their web page interest calculator said that this account should be making about $3400/ year. I have yet to get any interest from the funds on deposit. has anyone hear got any insight? this is in a IBpro account. i am looking to offset some of the damn near $1500.00 i pay in trading cost each month.

thanks in advance.
 
Welcome to Elite Trader. We custody at Wedbush Securities, not IB. We do not offer a daily sweep to an interest bearing account. We offer the ability to buy T-bills (Margined at 90%) and Money Market funds like VUSXX Vanguard Treasury Money Market Fund (Margined at 99%). T-bill cost $50 to buy or sell and VUSXX has no cost to buy/sell. Last Month VUSXX paid 1.87%. https://investor.vanguard.com/investment-products/mutual-funds/profile/vusxx#distributions. My email is below if you are open to a change.
 
1pyramidtrader said:
with rates going up a bit, i was wondering if anyone on here knew anything about interest paid by IB on cash balances. I have about 200K in the account that i uses to support option credit spreads. their web page interest calculator said that this account should be making about $3400/ year. I have yet to get any interest from the funds on deposit. has anyone hear got any insight? this is in a IBpro account. i am looking to offset some of the damn near $1500.00 i pay in trading cost each month.

thanks in advance.
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IBKR sends you a monthly overview of your account. One of the sections in the report shows credit interest and debit interest ("interest accruals"). They accrue it on a daily basis. It is added to, or taken from, your account once per month.
 
1pyramidtrader said:
with rates going up a bit, i was wondering if anyone on here knew anything about interest paid by IB on cash balances. I have about 200K in the account that i uses to support option credit spreads. their web page interest calculator said that this account should be making about $3400/ year. I have yet to get any interest from the funds on deposit. has anyone hear got any insight? this is in a IBpro account. i am looking to offset some of the damn near $1500.00 i pay in trading cost each month.

thanks in advance.
More...

IB actually pays you interest on any idle cash that you have in your account according to the rates published on their website but the cash has to be idle meaning that it's uninvested and just parked there. Once and for the whole duration that the cash is invested in any assets, stocks, options and etc., you won't earn interest on it. The interest is paid monthly I believe.
 
TheDawn said:
IB actually pays you interest on any idle cash that you have in your account according to the rates published on their website but the cash has to be idle meaning that it's uninvested and just parked there. Once and for the whole duration that the cash is invested in any assets, stocks, options and etc., you won't earn interest on it. The interest is paid monthly I believe.
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this account is in settled cash at all times. it is my understanding that when options are net sold that net sale price goes into settled cash and thus should get the interest sweep. i have posted an open ticket to them. i ran up on a thread on another site where a person had a balance of 500K and did not get the sweep. i am trying to relocate that post if i find it i will add link
 
1pyramidtrader said:
this account is in settled cash at all times. it is my understanding that when options are net sold that net sale price goes into settled cash and thus should get the interest sweep. i have posted an open ticket to them. i ran up on a thread on another site where a person had a balance of 500K and did not get the sweep. i am trying to relocate that post if i find it i will add link
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No when the options are net sold, the settled cash is not considered idle cash but part of the margin used for the short position so no interest is paid on that since interest is only paid on idle cash. Once the options position expires then the cash tied up previously with the position will be freed up and becomes idle cash and that's when the interest starts to be paid on it. That's as far as I understand. Let us know what IB's response is.
 
IB pays interest on any interest bearing positive currency balances. Their tbills are marginable at 99% not 90%. Trading tbills costs a few dollars, not 50. Dec 20 bills paid as of last Thursday over 3%. Also, the fund you mentioned offers a completely inferior performance to tbills even though it claims to invest 80% in tbills.

So, why post a completely inferior service offering? Did the 1500 paid in commission per month sound just too juicy? :D

Robert Morse said:
Welcome to Elite Trader. We custody at Wedbush Securities, not IB. We do not offer a daily sweep to an interest bearing account. We offer the ability to buy T-bills (Margined at 90%) and Money Market funds like VUSXX Vanguard Treasury Money Market Fund (Margined at 99%). T-bill cost $50 to buy or sell and VUSXX has no cost to buy/sell. Last Month VUSXX paid 1.87%. https://investor.vanguard.m/investment-products/mutual-funds/profile/vusxx#distributions. My email is below if you are open to a change.
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I believe that's how IB does it.

TheDawn said:
No when the options are net sold, the settled cash is not considered idle cash but part of the margin used for the short position so no interest is paid on that since interest is only paid on idle cash. Once the options position expires then the cash tied up previously with the position will be freed up and becomes idle cash and that's when the interest starts to be paid on it. That's as far as I understand. Let us know what IB's response is.
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Just what is going to look like a strange question. Are these European verticals? If so understand how they margin the verticals. You should chat with them
 
ETJ said:
Just what is going to look like a strange question. Are these European verticals? If so understand how they margin the verticals. You should chat with them
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well not to get to deep into it, i will tell you the account position over this weekend

cash balance is $218,990
only position in the account over weekend is
long 25 calls es (e mini s and p 500) strike is 4200
short 25 calls es strike is 4150

initial margin is $68,000

should this account not earn something on the daily sweep?
 
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