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Trading Configuration
Before trading, customers must configure their account by selecting an account type, trading permissions and market data/news subscriptions. It should be noted that subscribing to trading permissions is independent from subscribing to market data. Your trading configuration may be set up during the registration process or at any subsequent time through Account Management. Account Type determines how your account will be margined and is available for Reg T Margin, Cash and Portfolio Margin configurations. Although not strictly an account type, for clarity we have pulled out the Reg T Margin IRA information into its own column. IRA accounts can be either cash or margin accounts.
Trading permissions specify which products can be traded and in which locations, and when specifying permissions you will be asked to sign any risk disclosures required by local regulatory authority.
Market data subscriptions specify the exchanges from which you would like to receive real-time market data. Many exchanges charge for market data, and we will directly pass through these fees. In addition, we offer a real-time news subscription service which is free for non-professionals, if more than USD 30 (or non-USD equivalent) is spent on commissions in any given month.
When opening your account you have a choice of Reg T Margin, Reg T IRA, Cash, or Portfolio Margin account types. For more specific information on margin calculations, see our Margin Requirements page. The following table provides a quick-glance comparison of these accounts. View the account type page from the links above for more details.
Reg T Margin |
Reg T Margin - IRA |
Cash |
Portfolio Margin1 |
|
| Stocks and Warrants |
|
|
|
|
| Bonds |
|
|
|
|
| Stock and Cash Index Options |
|
|
|
|
| Futures2 |
|
|
|
|
| Futures Options2 |
|
|
|
|
| Mutual Funds |
|
|
|
|
| Single Stock Futures2 |
|
|
|
|
| Forex |
|
|
|
|
Notes:
- (1)Portfolio Margin accounts are not available for IB Canada customers due to IDA restrictions.
- (2)Please note that for commodities, including futures, futures options and single stock futures, "margin" refers to the amount of cash that must be put up BY THE CLIENT as collateral to support a transaction, in contrast to margin for securities which refers to the amount of cash a client borrows from IB.
- (3)Accounts with IBPrime services require a minimum of USD 500,000 or USD equivalent.
- Margin accounts have the ability to trade in all available countries.
- IRA accounts can have cash or margin trading permissions, but margin accounts are never allowed to borrow cash (have a debit balance) as per US IRS regulation.
- Cash accounts may be upgraded to Reg T Margin accounts but Reg T Margin accounts may not downgraded to cash accounts.
- In SIPP accounts, the initial and maintenance margin requirements for commodities are 150% of their normal margin requirements. Commodities include futures, futures options and single stock futures.
Trading permissions are required in order to provide customers with all the proper regulatory disclosures and provide customers with the ability to trade. They may be elected at the time of application or upgraded at anytime through Account Management. Upgraded permissions are subject to regulatory review, and any upgrade request received by 11:00 ET on a business day will be reviewed by the next business day under normal circumstances.
Trading permissions are broken down by asset class and country as shown below.
| Available Countries | |
| Stocks |
|
| Fixed Income |
|
| Stock & Cash Index Options(1) |
|
| Futures |
|
| Futures Options |
|
| Mutual Funds |
|
| Single Stock Futures |
|
| Forex |
|
| ETFs |
|
| Warrants |
|
| CFDs |
|
Notes:
- Because of SEC restrictions, US legal resident customers are not allowed to trade non-US stock and cash index options.
- Available to non-Italian residents only.
We directly pass real-time market data fees through to the customer. Exchanges generally have a two tier pricing structure for non-professionals and professionals, with professionals paying higher rates. We offer two subscriptions to non-professionals for free when more than USD 30 (or equivalent) is spent on commissions in any given month; US market data and Reuters Real-time News.
To view, add, or delete Market Data and Reuters Fundamentals and News subscriptions, sign into Account Management then select Market Data Subscriptions from the Trading Access menu. You can also search for market data subscriptions by stock symbol and exchange, ISIN or CUSIP number using the Market Data Assistant, which is available from the Market Data Subscriptions page in Account Management.
For specific information and schedules for market data, real-time Reuters Fundamental Analysis and Newsfeed subscription fees, click here.
An IB Reg T Margin account allows borrowing to support:
- equities trading,
- shorting of equities,
- full options trading,
- full futures/futures options trading
- currency conversions
- securities/commodities trading in multiple currency denominations.
Margin requirements are computed on a formula-based real-time basis, with immediate position liquidation if the minimum maintenance margin requirement is not met. Purchase and sale proceeds are immediately recognized. US securities regulations require at least USD 25,000 (or USD equivalent) in equity to day trade.
Borrowing to support bond trading. Margin requirements are computed on a real-time basis, with immediate position liquidation if the minimum maintenance margin is not met. Purchase and sale proceeds are immediately recognized. Shorting of bonds is not allowed.
For buying options, you must deposit the entire premium plus commissions. For selling options and other strategy-based combinations, the margin requirements and commissions must be covered. Option market value may never be used for the purpose of borrowing funds. You must have stocks margin trading permissions in order to have options margin trading permissions.
Please note that for commodities, "margin" refers to the amount of cash that must be put up BY THE CLIENT as collateral to support a transaction, in contrast to margin for securities which refers to the amount of cash a client borrows from IB. For futures trading, special 50% of variation margin benefits are made available during the day on some futures exchanges.
Borrowing to support Mutual Funds may only be done 30 days after the purchase of the fund. Shorting Mutual Funds is never allowed. Net Asset Value is computed once per day at closing by the funds at which time your margin requirement and equity will be updated. Liquidation will occur on an end-of-day basis if minimums aren't met. Purchase and sales proceeds are recognized at the end of the day when the Mutual Fund order is submitted and confirmation received.
This also includes the purchase and sale of stocks, exchange traded funds and narrow based index futures contracts on margin. Margin is determined on a real-time basis with immediate position liquidation if the minimum margin requirement is not met. In the US, SSFs may be cross margined with stocks and options (IRA accounts can only cross margin SSFs, not stocks and options).
Borrowing in one currency to purchase another currency is allowed, but margin haircuts will be applied on a real-time basis. Margin accounts automatically get Forex trading permissions in order to effect trading of products denominated in multiple currencies.
To compare the characteristics of a Reg T margin account with those of Cash and Portfolio Margin accounts, see the Account Types comparison table.
US resident customers may open cash or margin Individual Retirement Accounts (IRAs).
IRA margin accounts are afforded all the benefits of a margin account, such as the ability to day trade and the ability to trade multiple currencies and multiple currency products, but are subject to the following limitations:
- IRA accounts cannot borrow cash (i.e. have a debit balance or short stocks).
- IRA accounts may be opened in any base currency, but when trading in a non-base currency product a currency trade must be executed first as you cannot borrow currencies.
- IRA accounts can only cross-margin single stock futures, not stocks and options.
- IRA accounts cannot borrow currencies.
Customers are advised to consult a tax specialist for further details on IRA rules and regulations.
When you open an IRA account with Interactive Brokers, you must select a type of IRA account and an IRA subtype. The title of your IRA account includes both the IRA type and IRA subtype (for example, Traditional Inherited). The following IRA types are available:
- Traditional
- Roth
- Simplified Employee Pension (SEP)
The following IRA subtypes are available:
- New – This is a new IRA account being funded for the first time.
- Rollover – You are transferring funds from an IRA account with another trustee/custodian to an IB-IRA account, or transferring from a Qualified plan such as a 401(k), pension or other employer-sponsored plan, within 60 days following a distribution to you. A rollover is commonly used if you are changing jobs or retiring. Rollovers are generally not subject to withholding tax and penalties, however, different rules apply if you are under age 59½. Consult your tax advisor.
Transfer methods describe the way an IB IRA account is funded. All of the following transfer methods are cash transactions, and Trustee-to-Trustee transfers can also use an ACATS position transfer in Account Management.
- Contribution - The dollar amount of assets you are contributing to an IRA account, subject to certain limits based upon your age and the year of the contribution. Contributions are reported to the Internal Revenue Service (IRS).
- Rollover - A transfer of funds from an IRA account with another trustee/custodian, within 60 days following a distribution, to an IB-IRA account. Rollovers are required to be reported to the IRS. IRA account types must be the same in order to rollover assets, for example if the originating account is a Roth IRA, your IB account must also be a Roth IRA.
- Direct Rollover - A transfer of funds from a qualified plan (pension, 401(k) or other qualified retirement plan) with an employer to an IB Traditional IRA account. In a Direct Rollover, the trustee/custodian of your employer qualified plan (401(k) or pension) transfers your retirement assets directly to IB. In general, no withholding tax or penalties apply to a Direct Rollover, however Direct Rollovers are reported to the IRS.
- Trustee-to-Trustee - A transfer of funds from an IRA account held with another trustee/custodian to an IB-IRA account, where the assets are transferred directly trustee/custodian to trustee/custodian, with no distribution of assets to you. ACATs position transfers are available, however the IRA account type and Tax ID must match in order to execute the transfer. Trustee-to-trustee transfers are not required to be reported to the IRS.
Refer to the Tax Reporting page on our website for information on IRS forms you will receive when transferring retirement plan assets.
The following table lists all available IRA types, subtypes and applicable transfer methods.
| IRA Type | Explanation | Subtype | Transfer Method |
| Traditional | A retirement savings plan that allows an individual taxpayer to contribute earnings until they are withdrawn. Contributions are subject to annual limits depending on the age of the account owner and may or may not be deductible depending on the individual’s circumstances. Earnings accumulate tax deferred until distributed to you at which time the earnings are subject to tax upon withdrawal. A spouse may contribute to a separate account subject to the same limits. Withdrawals made prior to age 59½ are subject to a 10% penalty unless certain special circumstances apply. Distributions must begin by the account owner’s required beginning date (RBD), which is April 1 following the year you turn age 70½. Once you reach age 70½, you must withdraw at least a minimum amount – an annual Required Minimum Distribution (RMD) - by December 31 of each year. If an account owner fails to withdraw the full amount of the RMD annually, or fails to withdraw the RMD, there is a 50% tax penalty on the amount not withdrawn. | New |
|
| Rollover |
|
||
| Inherited | Trustee-to-Trustee | ||
| Roth | A retirement savings plan that allows an individual taxpayer to contribute earnings, subject to certain income limits. Earnings accumulate tax-free and contributions are nondeductible. Unlike Traditional IRAs, a Roth IRA account owner may continue to contribute after age 70½ if they have earned income. Withdrawals prior to age 59½ are subject to a 10% penalty unless special circumstances apply. There are no age requirements when an account owner must begin taking distributions. Contributions are subject to annual limits depending on the age of the account owner. | New |
|
| Inherited | Trustee-to-Trustee | ||
| Simplified Employee Pension (SEP) | A tax-deferred retirement plan for small businesses and self-employed individuals where an employee can set aside a percentage of pre-tax income into the plan. Annual contributions an employer makes to an employee’s SEP-IRA cannot exceed the lesser of 25% of compensation, or $45,000 for 2009 and 2010. The same limits apply to contributions made to a self-employed individual’s SEP-IRA. There is 100% vesting of all plan contributions. Distributions generally follow the same rules that apply to IRAs. | New |
|
| Inherited | Trustee-to-Trustee |
|
Contribution
Year |
Roth, Traditional, & Direct Rollover Contribution Limit
(Under Age 50) |
Roth, Traditional, & Direct Rollover Contribution Limit
(Age 50 and over) |
Simplified Employee Pension
(SEP- IRA) |
|
Filing Deadline 4/15 of following year
|
Filing Deadline 4/15 of following year
|
Filing Deadline 4/15 of following year or as extended
10/15
|
|
|
2008
|
5,000
|
6,000
|
Lesser of 25% eligible Comp. or $46,000 |
| 2009 | 5,000 |
6,000 |
Lesser of 25% eligible Comp. or $49,000 |
| 2010 | 5,000 |
6,000 |
Lesser of 25% eligible Comp. or $49,000 |
For IRA FAQs, click here.
An IB Cash account requires the account holder to have enough cash in the account to cover the cost of the transaction plus commissions. No shorting is allowed. The account may trade in multiple currencies, but must have the settled cash balance to enter trades. Existing cash account holders can upgrade to a multi-currency cash account through Account Management.
You must have enough cash in the account to cover the cost of the stock plus commissions. Shorting of stock is not allowed. Cash from the sale of stocks becomes available 3 business days after the trade date. When authorizing market, relative and VWAP orders, a 5% cash cushion is required to compensate for market movements.
Margin requirements are computed on a real-time basis, with immediate position liquidation if the minimum maintenance margin is not met. Purchase and sale proceeds are immediately recognized. Shorting of bonds is not allowed.
Full payment must be made for all call and put purchases. Cash accounts allow for limited purchase and sale of options as follows:
- Covered call writing is allowed, but the underlying stock must be available and is then restricted.
- Naked put writing is also allowed, but the funds must be available and then are restricted.
You must have stock cash trading permissions in order to have options cash trading permissions. Cash from the sale of options becomes available 1 business day after the trade date.
Futures day trading benefits are not supported. (50% of regular margin requirements during the day, on certain exchanges). Margin is determined on a real-time basis with immediate position liquidation if the minimum margin requirement is not met. Only cash may be used to meet variation margin requirements. Non-US futures options are available to US legal resident customers. You must have futures trading permissions in order to have options on futures trading permissions.
You must have enough cash in the account to cover the cost of the fund plus commissions. Shorting of funds is not allowed. Cash from the sale of funds becomes available 1 business day after the trade date. Mutual Funds are only available to US legal residents.
This also includes the purchase and sale of stocks, exchange traded funds and narrow based index futures contracts on margin. Margin is determined on a real-time basis with immediate position liquidation if the minimum margin requirement is not met. In the US, SSFs may be cross margined with stocks and options (IRA accounts can only cross margin SSFs, not stocks and options).
Cash from Forex transactions becomes available 2 business days following the trade date.
To compare the characteristics of a Cash account with those of Reg T margin and Portfolio Margin accounts, see the Account Types comparison table.
- Long stock has no margin and no loan value.
- You cannot short stock.
An IB Portfolio Margin account allows borrowing to support:
- equities trading,
- shorting of equities,
- full options trading,
- full futures/futures options trading
- currency conversions
- securities/commodities trading in multiple currency denominations.
Margin requirements use a risk-based calculation methodology and are generally lower than margin requirements in a Reg T margin account.
Margin is based on the largest potential loss found by valuing the portfolio over a range of underlying prices and volatilities on a real-time basis. Immediate position liquidation will occur if the minimum maintenance margin requirement is not met. Purchase and sale proceeds are immediately recognized. US securities regulations require at least USD 100,000 (or USD equivalent) for this account. Accounts with IBPrime services require a minimum of USD 500,000 (or USD equivalent). If account equity falls below the Portfolio Margin requirements, Reg T margin requirements will apply.
Borrowing to support bond trading. Margin requirements are computed on a real-time basis, with immediate position liquidation if the minimum maintenance margin is not met. Purchase and sale proceeds are immediately recognized. Shorting of bonds is not allowed.
Margin is based on the largest potential loss found by valuing the portfolio over a range of underlying prices and volatilities on a real-time basis. Immediate position liquidation will occur if the minimum maintenance margin requirement is not met. Purchase and sale proceeds are immediately recognized. US securities regulations require at least USD 100,000 (or USD equivalent) for this account. Accounts with IBPrime services require a minimum of USD 500,000 (or USD equivalent). If account equity falls below the Portfolio Margin requirements, Reg T margin requirements will apply.
Margin is determined on a real-time basis with immediate position liquidation if the minimum margin requirement is not met. Only cash may be used to meet variation margin requirements. Special 50% of variation margin benefits are made available during the day on some futures exchanges. Non-US futures options are available to US legal resident customers. You must have futures trading permissions in order to have options on futures trading permissions.
Margin is based on the largest potential loss found by valuing the portfolio over a range of underlying prices and volatilities on a real-time basis. Immediate position liquidation will occur if the minimum maintenance margin requirement is not met. Purchase and sale proceeds are immediately recognized. US securities regulations require at least USD 100,000 (or USD equivalent) for this account. Accounts with IBPrime services require a minimum of USD 500,000 (or USD equivalent). If account equity falls below the Portfolio Margin requirements, Reg T margin requirements will apply.
Margin is based on the largest potential loss found by valuing the portfolio over a range of underlying prices and volatilities on a real-time basis. Immediate position liquidation will occur if the minimum maintenance margin requirement is not met. Purchase and sale proceeds are immediately recognized. US securities regulations require at least USD 100,000 (or USD equivalent) for this account. Accounts with IBPrime services require a minimum of USD 500,000 (or USD equivalent). If account equity falls below the Portfolio Margin requirements, Reg T margin requirements will apply.
Purchase and sale of stocks, exchange traded funds and narrow based index futures contracts on margin. Margin is determined on a real-time basis with immediate position liquidation if the minimum margin requirement is not met. In the US, SSFs may be cross margined with stocks and options (IRA accounts can only cross margin SSFs, not stocks and options).
Borrowing in one currency to purchase another currency is allowed, but margin haircuts will be applied on a real-time basis. Margin accounts automatically get Forex trading permissions in order to effect trading of products denominated in multiple currencies.
To compare the characteristics of a Portfolio margin account with those of Reg T Margin and Cash accounts, see the Account Types comparison table.
Financial Information Requirements
The following table lists the requirements you must meet to be able to trade each product. Be sure to read the notes at the bottom of the table, as they contain important additional information. Note that the information below does not apply to accounts that list India as the country of legal residence/formation.
Important: To qualify as an IB customer, you must meet these requirements:
- You must have executed at least 100 prior trades for any product type (Stock, Options, Futures, and so on).
- To trade any product, you must have a Good or Extensive Knowledge Level for that product.
- To trade any product, you must have a minimum of two years trading experience with that product.
- Your Net Worth cannot be less than your Liquid Net Worth.
- To qualify for a Portfolio Margin account, your Net worth and Liquid Net Worth must each be greater than 100,000 USD.
| Product | Investment Objectives | Liquid Net Worth/Income Minimums Age |
|||
>50 or ORG |
41-50 |
31-40 | 21-30 | ||
| Stocks Bonds Mutual Funds[1] |
|||||
| Cash Account | Income or Growth or Trading Profits or Speculation or Hedging |
>20,000/Any (customers aged 18-21 are eligible to trade stocks if they meet all other requirements) |
|||
| Reg T Margin Account | Growth or Trading Profits or Speculation or Hedging |
>20,000/>40,000 | |||
| Portfolio Margin Account | Trading Profits or Speculation |
>100,000/Any | |||
| Options (Stocks are automatically selected when you select Options) [2] [3] [5] |
|||||
| Cash Account | Trading Profits or Speculation |
>100,000/Any | >75,000/>50,000 | >50,000/>45,000 | >20,000/>40,000 |
| Reg T Margin Account | Trading Profits or Speculation |
>100,000/Any | >75,000/>50,000 | >50,000/>45,000 | >20,000/>40,000 |
| Portfolio Margin Account | Trading Profits or Speculation |
>100,000/Any | >100,000/Any | >100,000/Any | >100,000/Any |
| Forex (IDEALPRO) [4] [5] | |||||
| Cash Account | Trading Profits or Speculation or Hedging |
>100,000/Any | >75,000/>50,000 | >50,000/>45,000 | >20,000/>40,000 |
| Reg T Margin Account | Trading Profits or Speculation or Hedging |
>100,000/Any | >75,000/>50,000 | >50,000/>45,000 | >20,000/>40,000 |
| Portfolio Margin Account | Trading Profits or Speculation |
>100,000/Any | >100,000/Any | >100,000/Any | >100,000/Any |
| Futures Futures Options [6] CFDs [8] |
|||||
| Cash Account | Growth or Trading Profits or Speculation [7] or Hedging |
>100,000/Any | >75,000/>50,000 | >50,000/>45,000 | >20,000/>40,000 |
| Reg T Margin Account | Growth or Trading Profits or Speculation [7] or Hedging |
>100,000/Any | >75,000/>50,000 | >50,000/>45,000 | >20,000/>40,000 |
| Portfolio Margin Account | Trading Profits or Speculation [7] |
>100,000/Any | >100,000/Any | >100,000/Any | >100,000/Any |
| Single-Stock Futures [2] | |||||
| Reg T Margin Account | Growth or Trading Profits or Hedging |
>100,000/Any | >75,000/>50,000 | >50,000/>45,000 | >20,000/>40,000 |
| Portfolio Margin Account | Trading Profits or Speculation |
>100,000/Any | >100,000/Any | >100,000/Any | >100,000/Any |
| [1] | Only applicants with US accounts and US residence can trade Mutual Funds. |
| [2] | If you select only Options or only Single-stock Futures, Stocks will automatically be selected as well. |
| [3] | For Options, in addition to the Years Trading and Trades per Year requirements, your Total lifetime Options trades must equal 100. For options, this is defined as stock trades + options trades + futures trades = 100 total trades lifetime. |
| [4] | For Forex, in addition to the Years Trading and Trades per Year requirements, your Total lifetime Forex trades must equal 100. For options, this is defined as stock trades + options trades + futures trades + forex trades = 100 total trades lifetime. |
| [5] | Applicants who have completed the teaching exam for Options or Forex are exempt from the two years experience requirement to trade those asset classes. |
| [6] | If you select Futures Options only, Futures will automatically be selected as well. |
| [7] | The Speculation investment objective requirement does not apply to Futures and Futures Options trading in a Trust account. |
| [8] | For Non-US and Non-Canadian accounts. |