Interest Markups and Markdowns

Instructions

Brokers can mark down credit and short proceeds credit interest and mark up debit interest. Markups and markdowns are entered as %. To specify the interest markups and markdowns, please take the steps outlined below.

  1. Click Menu in the top left corner > Administration & Tools > Fees & Invoicing > Fees
  2. The display selector will open on the right hand side.
    • To sort the list by any column heading, click the arrow next to that heading.

    The select account panel in portal.

  3. Select an account you'd like to charge a markup to.
  4. Select if you'd like to use a Client Fee Template

  5. Select the Fee Strategy from the drop-down menu

    Image of the select fee strategy panel in portal.

  6. Select the Interest Rates check box and select the currency you are looking to charge an interest markup / markdown on.

    Image of the interest rates check box option in portal.

  7. Specify the interest rate fees that you are looking to charge. For more information on this, please click here.

    Image of the specify the interest rate fees in portal.

  8. Press Continue to review and Save.

Brokers can charge markups to their clients based on our stock borrow rates, entered as a variable or fixed percentage of our borrow rate. You can enter both types of markups and our system will apply the markup rate that results in the larger total amount.

  • Variable borrow fee markup - This is a variable percentage of our borrow rate. The total cost to your client is calculated as follows:

    • Borrow Rate (1 + Variable Markup Percentage)

    • The range of acceptable values that you can enter is 0 - 25%.

  • Fixed borrow fee markup - This is a fixed percentage of our borrow rate. The total cost to your client is calculated as follows:

    • Borrow Rate + Fixed Markup Percentage

    • The range of acceptable values that you can enter is 0 - 1%.

Example

Symbol ABC Borrow Rate = 35%

Variable Borrow Markup = 20%

Fixed Borrow Markup = 1%

Calculating the total cost to your client, we have:

  • Variable Markup:

    • 35% (1+20%) = 42% total cost to your client

      or

    • 0.35 (1.2) = 0.42

  • Fixed Markup:

    • 35% + 1% = 36%

      or

    • 0.35 + 0.01 = 0.36

Our system applies the larger total amount, so in this example, we would apply the Variable Borrow Markup and the total cost to your client is 42%, which includes our borrow rate plus your borrow markup.

Note: Interest markups and markdowns are rounded to two decimals.

Learn more about Interest Markups and Markdowns at IBKR Campus.

 

Additional Resources

Learn About Broker Interest Rate Markups at IBKR Campus

Visit the IBKR Broker Portal Website

Log in to Client Fees