Interests on futures accounts

D

DT-waw

On some internet site I saw an explanation of "Interests Earned" field in Tradestation report. http://www.clayburg.com/Strategy Analysis.htm

"Interests earned: the interest rate your money earns when not in the market".

With stock accounts it's easy: I buy a stock - I have less money on the account - I will earn less interests. How it works with futures accounts?
From what I know, when I open a position in futures, funds ( required margin ) are still on the account, they're "locked" until I close a position. Account cash balance is changing only due to profits or losses, but funds are always on my acct, regardless of open positions.

So, how are my interests calculated? How are interests calculated on IB's futures accts?

Thanks,
DT-waw
 
Neither TradeStation nor IB (nor any other futures broker I'm familiar with) pay interest on funds in a Futures account. That appears to be one of the tradeoffs when doing futures trading. (There's a thread up here somewhere that previously discussed this topic.)
 
Neither TradeStation nor IB (nor any other futures broker I'm familiar with) pay interest on funds in a Futures account.

However, I believe, you can buy treasury notes in your futures account and use it as margin colateral. So you'll be earning interest with your treasury notes.

Richard
 
Richard is right. When my account was with Lind-Waldock, I could buy T-notes in $10,000 increments. I have not seen this option at IB, but the commission savings more than made up for a little interest.

Kirk
 
small correction,
IB does pay interest on futures accounts on balances above 10K. The interest earned is Libor-50 bps on balances less than 100K and libor - 25bps on higher balances. Libor as of Nov 30 was 2.174. The benchmark rate depends on the currency the account is funded in.
 
Def: Cool. That must have changed since the last time this topic was discussed up here. Any word yet on multi-currency futures accounts or combined stock and futures accounts (I've got a currently inactive stock only account with IB that I'd like to convert). Thanks.
 
dkamp,
i believe the interest policy has been the same since day 1. as for the mult-curreny on futures - it is supposed to be coming very shortly. all-in-one - i don't know.
 
Still, my question hasn't been answered. Def, does IB pay interests even if my all account's funds are used to cover margin for open positions in futures?

Thanks
DT-waw
 
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