Understanding IBKR GME Borrow Rate and Costs

The IBKR GME borrow rate can be a bit overwhelming, especially if you're new to trading. The borrow rate is a fee charged by Interactive Brokers (IBKR) for borrowing cash to buy a stock you don't own.

IBKR charges a variable interest rate, which is based on the stock's volatility and the amount borrowed. The minimum interest rate is 6.25% APR, and it can go up to 50% APR or more in extreme cases.

To give you a better idea, let's say you borrow $10,000 to buy a stock with a 20% interest rate. You'll be charged $2,000 in interest over a year, in addition to any dividends or capital gains the stock may generate. This can add up quickly, so it's essential to understand the costs involved.

Calculating the cost of borrowing stock at Interactive Brokers involves two key factors: the Borrow Fee and the Short Sale Proceeds interest you receive from IBKR. These two factors will impact your daily costs.

The Borrow Fee is a rate that applies to the borrowed stock, and it's based on the symbol, share price, and quantity of the stock. For example, if you're borrowing AAPL stock, the Borrow Fee Rate will be applied to the total amount borrowed.

The Short Sale Proceeds interest rate is another important factor that affects your daily costs. This interest rate is applied to the short sale proceeds, and it's used to calculate the interest amount you receive from IBKR. For instance, if you're short selling MUB stock, the Short Sale Proceeds interest rate will be applied to the short sale proceeds.

To get a better understanding of your borrowing costs, you can use the interest calculator provided by Interactive Brokers. However, keep in mind that this calculator is for informational purposes only and should not be relied upon as a guarantee of accuracy.

Orbisa observed a 6% week-on-week increase in the total number of shares borrowed for GameStop Corporation (GME) as demand for lendable shares grew to 94%.

The indicative buy-side financing rate for GME was a week-on-week spike of 339%, reaching 1,014bps.

Orbisa will continue to closely monitor developing market conditions to provide further insights into borrowing costs.

Calculating borrowing costs can be a complex task, but there are key factors to consider.

The cost of borrowing stock at Interactive Brokers is influenced by two main factors: the Borrow Fee and the interest earned on Short Sale Proceeds.

The Borrow Fee is a daily charge that varies depending on the security being borrowed. It's calculated based on the Borrow Fee Rate, which is specific to each stock.

The interest earned on Short Sale Proceeds is also a daily amount, calculated based on the Short Sale Proceeds Interest Rate. This interest is earned on the proceeds of the short sale, not the borrowed stock itself.

These two factors work together to determine the daily cost of borrowing stock at Interactive Brokers.