When trading in Interactive Brokers Securities, you may be required to pay a predetermined commission fee and other fees and expenses. In addition, there is a possibility of incurring losses due to fluctuations in the prices of the products handled. When trading, please read the pre-contract documents and other information carefully, fully understand the contents, and trade at your own discretion and responsibility. Please refer to each page for important information on fees, risks for each product and other topics that are summarized below. Review the IBKR commission fees for each product. Please refer to the Company's website, documents for listed securities, and documents delivered prior to the conclusion of a contract for risk and other detailed explanations of each product.
Risks Associated with Trading Domestic and Foreign Listed Securities
Risks of Index Futures and Options Trading
Risks of Securities Options Trading
Risks of Trading JGB Futures and Options
Risks of Trading CFDs on Securities
Risks of IB Multi-Currency Enabled Accounts and Foreign Exchange Transactions
Risks of Securities-Related Foreign Market Derivatives Transactions
Interactive Brokers Securities Japan Inc ("IBSJ") Multi Currency Account allows you to trade foreign listed securities in a number of foreign currencies. The base currency for the multi-currency account is Japanese yen. The foreign exchange transactions are spot transactions.
IBSJ does not support deposits and withdrawals in all currencies of products that can be converted from the IBSJ platform, but only some currencies (hereinafter referred to as "currencies handled "*). Currencies that are not available for deposit or withdrawal must be converted to the currencies handled by IBSJ. We may also perform foreign exchange transactions necessary to satisfy obligations to IBSJ incurred in a particular currency (e.g., those resulting from financial instrument transactions).
Please refer to the FAQs for the types of currencies handled.
IBSJ's obligations to its clients are as follows:
Trading in securities and other financial instruments denominated in foreign currencies or traded in foreign markets is inherently risky and requires specialized knowledge. To use Interactive Brokers' multi-currency account, you must be aware of and understand the risks associated with trading foreign securities and currencies and have sufficient financial resources to bear such risks.
Exchange rates between foreign currencies can change rapidly due to various economic, political, and other conditions, and clients may be exposed to the risk of exchange rate losses in addition to the inherent risk of loss arising from transactions in the underlying financial instrument. If client deposits funds in one currency and trades instruments denominated in a different currency, the client's gain or loss on the underlying instrument may be affected by fluctuations in the exchange rate between the currencies.
When a client uses the foreign exchange facility provided by Interactive Brokers to buy or sell foreign currency, fluctuations in the exchange rate between the foreign currency and the base currency may result in significant losses, especially when converting back to the base currency.
When you enter into a foreign exchange transaction with Interactive Brokers, Interactive Brokers acts as a counterparty to your transaction either through an affiliate of Interactive Brokers, another client who enters quotes into Interactive Brokers' system, or through a third-party bank (Interactive Brokers' "Forex Provider") as a counterparty to your trade. In such transactions, the Forex Provider is not acting in the capacity of financial advisor or fiduciary to the client or Interactive Brokers but is the counterparty to Interactive Brokers' offsetting transactions in an independent contractual transaction. From time to time, the Forex Provider may take a substantial position in a foreign currency transaction entered by you, make a market in it, or buy or sell similar or economically related instruments. In addition, Interactive Brokers' Forex providers may engage in proprietary trading, including hedging transactions, in connection with foreign exchange transactions with Interactive Brokers, which may adversely affect the market price or other factors underlying the foreign exchange transaction you have entered and, in turn may adversely affect the value of such transactions.
Please note the following points when trading leveraged and inverse ETFs and ETNs2 among listed securities,
Index futures prices rise and fall due to fluctuations in the underlying index and other factors, which may result in losses. In addition, index futures trading allows traders to trade with a small amount of margin in excess of the amount of such margin, which may result in large losses from time to time. Therefore, it is necessary to fully understand the following information before starting index futures trading.
The amount of the margin deposit is not limited to the amount of the margin. Such losses may exceed the deposited margin.
When a margin deficiency occurs due to market fluctuations in index futures contracts, we will, at our discretion, reverse trade the commodity you are holding until the margin deficiency is eliminated, using our proprietary liquidation system. At Osaka Securities Exchange, when futures or options transactions other than index futures (index options, options on securities, and JGB futures and options) are traded in the same futures/options account, margins for the transactions in the relevant futures/options account are calculated and managed as one. Therefore, there may be cases where the margin for transactions other than index futures trading is insufficient due to market fluctuations, and the opposite transaction may be executed through the liquidation system. In addition, in the event of other events of forfeiture of the benefit of time under the terms of the agreement, the open interest in an index futures contract may be settled even if the event did not occur in relation to the index futures contract. In such cases, you will be liable for any losses incurred in the settlement.
In the event of counter-purchase or sale through the liquidation system, or in the event of other events of forfeiture of the benefit of time pursuant to the terms of the agreement, all or part of the open interest may be settled with a loss. Furthermore, in such cases, you will be liable for any losses incurred in such settlement.
Financial instruments exchanges may take regulatory measures such as raising the amount of margin when there is an anomaly in trading or the possibility of such an anomaly occurring, or when deemed necessary from the perspective of settlement risk management for financial instruments clearing organizations. In the event of a margin shortage, the Company will, at its discretion, close the margin shortage by counter-trading the instruments held by the client through the liquidation system, so please check your account status daily.
The market conditions may not allow you to trade as you intended. For example, if the market price has reached the price limit, resale or repurchase may not be possible.
Depending on market conditions, financial instruments exchanges may increase the price limits. In such cases, daily losses may be greater than anticipated.
In the index futures trading conducted by our company, we employ our proprietary liquidation system to monitor our clients' margin requirements in real time during trading hours. If a client falls short of margin, the Company will, at its discretion, reverse trade the commodity held by the client until the margin shortage is resolved. In such a case, the Company may reverse trade the commodity held by the client without notice to the client, and the client shall bear any losses incurred because of such reverse trade. Although we will execute reverse trades in the order and in the commodity specified by us, it is also possible for clients to specify the commodity in which reverse trades are to be executed last. However, even if the client specifies the commodity, the reverse transaction may not necessarily be executed in the order specified by the client due to the client's account conditions, and the reverse transaction may be executed in the order determined by the Company.
Although we employ our own liquidation system, we may not be able to keep losses within a certain range in the event of sudden market fluctuations or failure to execute the full volume of counter orders. In such cases, daily losses may be greater than anticipated.
The price of index options may rise or fall depending on fluctuations in the underlying index, and this may result in losses. Please note that there is a limit to the period during which an option can be exercised. In addition, since the market price of index options fluctuates according to the actual index, the fluctuation rate tends to be larger than that of the actual index, and in some cases, there is a possibility of incurring a large loss. Therefore, it is necessary to fully understand the following when starting index options trading.
The market conditions may not allow you to trade as you intended. For example, if the market price has reached the price limit, resale or repurchase may not be possible.
In our index options trading, we employ our proprietary liquidation system to monitor our clients' margin requirements in real time during trading hours. If a client falls short of margin, the Company will, at its own discretion, reverse trade the commodity held by the client until the margin shortage is resolved. In such a case, the Company may reverse trade the commodity held by the client without notice to the client, and the client shall bear any losses incurred because of such reverse trade.
Although reverse trades will be executed in the order and in the commodities designated by the Company, it is also possible for clients to designate the commodity in which reverse trades will be executed last. However, even if the client specifies the commodity, the reverse transaction may not necessarily be executed in the order specified by the client due to the client's account conditions, and the reverse transaction may be executed in the order determined by the Company.
Although we employ our proprietary liquidation system, we may not be able to keep losses within a certain range in the event of sudden market fluctuations or when the entire quantity of counter orders is not executed. In such cases, daily losses may be greater than anticipated.
The options on the index are time-dated instruments, and if the buyer does not exercise or resell the options by the expiration date, the right will be extinguished. In this case, the buyer will lose the entire amount of invested funds.
Sellers trade in excess of their margins, and their losses are not limited when market prices change in the opposite direction of their expectations.
When an index options transaction is executed, the seller must deposit margin. If a shortfall subsequently arises due to market fluctuations, the Company will, at its own discretion, buy or sell the opposite side of the instrument held by the client until the margin shortfall is eliminated, using the Company's proprietary liquidation system.When futures or options transactions other than index options transactions (index futures, options on securities, and JGB futures and options) are traded on Osaka Securities Exchange in the same futures and options account, margins for the transactions in the relevant futures and options account are calculated and managed as one. Therefore, there may be cases where the margin for transactions other than index futures and options transactions is insufficient due to market fluctuations, and the opposite transaction may be executed through the liquidation system. In addition, in the event of other events of forfeiture of the benefit of time as stipulated in the contract, the open interest in an Index Futures Options Contract may be settled even if the event did not occur in relation to the Index Futures Options Contract. In such a case, you will be liable for any losses incurred in the settlement.
In the event of counter-purchase or sale through the liquidation system, or in the event of other events of forfeiture of the benefit of time pursuant to the terms of the agreement, all or part of the open interest may be settled with a loss. Furthermore, in such cases, you will be liable for any losses incurred in such settlement.
Financial instruments exchanges may take regulatory measures such as raising the amount of margin, when an abnormality in trading occurs or is likely to occur, or when deemed necessary from the perspective of settlement risk management at a financial instrument clearing organization. In the event of a margin shortage, we will eliminate the shortage by counter-trading the instruments held by clients through the liquidation system, so please check your account status daily.
The seller must accept the allotment of exercise whenever he/she receives it. In other words, the seller must pay special attention to the exercise of the options, because the seller must pay the difference between the strike price and the option clearing value when he/she receives an allotment of the options.
The provisions of Article 37-6 of the Financial Instruments and Exchange Act do not apply to index futures and options transactions.
The price of options on securities may rise or fall depending on the market price of the underlying security, the underlying index, or the price or valuation of the asset backing the security, which may result in losses. Losses may also be incurred due to changes in the credit status of the issuer of the underlying securities. Please note that there is a limit to the period during which options can be exercised. Furthermore, since the market price of options on securities fluctuates in accordance with the actual market price, the fluctuation rate tends to be larger than the actual market price, and in some cases, significant losses may be incurred. Therefore, it is necessary to fully understand the following when commencing an options transaction in securities.
Market conditions may prevent you from trading as intended; for example, if the market price has reached the price limit, resale or repurchase may not be possible.
Depending on market conditions, financial instruments exchanges may increase the price limits. In such cases, daily losses may be greater than anticipated.
If a security underlying a securities option is delisted, such securities option may also be delisted, and such securities option may be delisted in consideration of the trading conditions of the securities option. In such cases, the last day of trading and the exercise date may be moved up or the opportunity to exercise the right may be lost. If the securities underlying the options are delisted due to corporate restructuring, such options may be transferred to options on securities of the surviving company, which were originally established or will be newly established, as determined by the financial instruments exchange. (For details, please refer to "8. Transfer of Open Interests upon Corporate Restructuring, " below.)
Trading of options on underlying securities may also be suspended when the underlying securities are suspended. Trading of such options may also be suspended if the issuer of the underlying security conducts a personal split.
In our securities options trading, we employ our proprietary liquidation system to monitor our clients' margin requirements in real time during trading hours. If a client falls short of margin, the Company will, at its discretion, buy or sell the opposite side of the instrument held by the client until the margin shortage is resolved. In such a case, the Company may reverse trade the commodity held by the client without notice to the client, and the client shall bear any losses incurred because of such reverse trade.
Although reverse trades will be executed in the order and in the commodities designated by the Company, it is also possible for clients to designate the commodity in which reverse trades will be executed last. However, even if the client specifies the commodity, the reverse transaction may not necessarily be executed in the order specified by the client due to the client's account conditions, and the reverse transaction may be executed in the order determined by the Company.
Although we employ our own liquidation system, we may not be able to keep losses within a certain range in the event of sudden market fluctuations, failure to execute the full volume of counter orders, or other such events. In such cases, daily losses may be greater than anticipated.
Options on securities are time-dated instruments, and if the buyer does not resell the options by the last day of trading and does not exercise the options on the exercise date, the options will be extinguished. In this case, the buyer will lose the entire amount of invested funds.
Sellers trade in excess of their margins, and their losses are not limited when market prices change in the opposite direction of their expectations.
When an options transaction is executed, the seller must put up or deposit margin. If a margin shortage occurs thereafter due to market fluctuations, the Company will, at its own discretion, buy or sell the opposite side of the commodity held by the client until the margin shortage is eliminated through the Company's proprietary liquidation system.
When futures or options transactions (index futures/options and JGB futures/options) other than options on securities are traded in the same futures/options account at Osaka Securities Exchange, margins for the transactions in the relevant futures/options account are calculated and managed as a single unit. Therefore, in some cases, margin may be insufficient due to market fluctuations in transactions other than securities options transactions, and reverse trades may be conducted through the liquidation system. In addition, in the event of other events of forfeiture of the benefit of time as stipulated in the contract, the open interest in securities options transactions may be settled even if the event did not occur with respect to securities options transactions. In such a case, the client is also liable for any losses incurred in the settlement.
The seller must accept the allotment of exercise when it is received. In other words, the seller must pay special attention to the exercise of the call option, because when the seller receives an allotment of the exercise of the right, the seller must have the securities sold in the case of a call option, or the purchase price in the case of a put option.
In the event of counter-purchase or sale through the liquidation system, or in the event of other events of forfeiture of the benefit of time pursuant to the terms of the agreement, all or part of the open interest may be settled with a loss. Furthermore, in such cases, you will be liable for any losses incurred in such settlement.
Financial instruments exchanges may take regulatory measures such as raising the amount of margin when an abnormality in trading occurs or is likely to occur or when deemed necessary from the perspective of settlement risk management at a financial instrument clearing organization. In the event of a margin shortfall, we will eliminate the margin shortfall by counter-trading the instruments held by clients through the liquidation system, so please check your account status daily.
The provisions of Article 37-6 of the Financial Instruments and Exchange Act do not apply to securities options transactions.
The price of JGB futures may rise or fall because of interest rate fluctuations and other factors, and this may result in losses of such fluctuations. In addition, JGB futures trading has the potential to incur large losses in some cases because a small amount of margin is required to trade in excess of the amount of such margin. Therefore, it is necessary to fully understand the following when commencing JGB futures trading.
The amount of the margin deposit is not limited to the amount of the margin. Such losses may exceed the deposited margin.
In the event of a shortfall due to market fluctuations in JGB futures contracts, the Company will, at its own discretion, reverse the margin requirements of the client's positions until the shortfall is eliminated through the Company's proprietary liquidation system.
When futures or options transactions other than JGB futures (index futures and options, options on securities, and options on JGB futures) are traded on Osaka Securities Exchange in the same futures and options account, margins for the transactions in the relevant futures and options account are calculated and managed as one. Therefore, there may be cases where the margin for transactions other than JGB futures may be insufficient due to market fluctuations and reverse trades may be conducted through the liquidation system. In addition, in the event of other events of forfeiture of the benefit of time under the terms of the agreement, the open interest in JGB futures contracts may be settled even if such events do not occur with respect to JGB futures contracts. In such a case, you will be liable for any losses incurred in the settlement.
In the event of counter-purchase or sale through the liquidation system, or in the event of other events of forfeiture of the benefit of time pursuant to the terms of the agreement, all or part of the open interest may be settled with a loss. Furthermore, in such cases, you will be liable for any losses incurred in such settlement.
The Financial Instruments Exchange may take regulatory measures such as raising the amount of margin when an abnormality in trading occurs or is likely to occur, or when deemed necessary from the perspective of settlement risk management at a financial instrument clearing organization. In the event of a margin shortfall, we will eliminate the margin shortfall by counter-trading the instruments held by clients through the liquidation system, so please check your account status daily.
The market conditions may not allow you to trade as you intended. For example, if the market price has reached the price limit, resale or repurchase may not be possible.
Depending on market conditions, financial instruments exchanges may increase the price limits. In such cases, daily losses may be greater than anticipated.
The JGB futures contracts that have not been settled by the date set by the Company will be settled by the Company through counter-purchase or sale.
In JGB Futures trading at the Tokyo Financial Exchange (TFX), we employ our own proprietary liquidation system to monitor our clients' margin requirements on a real-time basis during the day. If a client falls short of margin, we will, at our discretion, reverse trade the commodity held by the client until the margin shortage is resolved. In such a case, the Company may reverse trade the commodity held by the client without notice to the client, and the client shall bear any losses incurred because of such reverse trading. The reverse trade will be executed in the order and in the commodity specified by the Company, but the client may also specify the commodity in which the reverse trade will be executed last. However, even if the client specifies the commodity, losses may not be limited to a certain level due to the client's account situation or if the entire volume of the buy/sell order is not executed in the event of a sudden market fluctuation. In such cases, daily losses may be greater than anticipated.
The price of options on JGB futures may rise or fall because of interest rate fluctuations and this may result in losses. Please note that there is a limit to the period during which options can be exercised. In addition, since the market price of options on JGB Futures changes in accordance with the price of JGB Futures to be exercised, the volatility of the market price tends to be larger than that of JGB Futures, and in some cases, significant losses may be incurred. Therefore, it is necessary to fully understand the following when commencing JGB Futures Options trading.
The market conditions may not allow you to trade as you intended. For example, if the market price has reached the price limit, resale or repurchase may not be possible.
Depending on market conditions, the FIU may increase the price limits. In such cases, daily losses may be greater than anticipated.
Options trading on JGB futures conducted by the Company employs its own liquidation system which monitors clients’ intraday excess liquidity in real time. If a client falls short of margin, we will, at our discretion, reverse trade the commodity held by the client until the margin shortage is resolved. In such a case, the Company may reverse trade the commodity held by the client without notice to the client, and the client shall bear any losses incurred because of such reverse trading. The opposite transaction will be executed in the order and in the commodity specified by the Company. However, even if the client specifies the commodity, losses may not be limited to a certain level due to the client's account situation or if the entire volume of the buy/sell order is not executed in the event of a sudden market fluctuation. In such cases, daily losses may be greater than anticipated.
Options on JGB futures are time-dated instruments. If the buyer does not exercise or resell the options by the expiration date, the right will be extinguished. In this case, the buyer will lose the entire amount of invested funds.
Sellers will be trading larger amounts than their margins, and their losses are not limited when market prices change in the opposite direction of their expectations.
When an options contract on JGB futures is executed, the seller is required to put up or deposit margin. If a shortfall subsequently arises due to market fluctuations, we will, at our discretion, reverse trade the commodity held by the client until the margin shortfall is eliminated through our proprietary liquidation system.
When futures or options transactions (index futures and options transactions, securities options transactions, and JGB futures transactions) other than JGB options transactions are traded in the same futures/options account at Osaka Securities Exchange, the margins for the transactions in the relevant futures/options account are calculated and managed as one. Therefore, there may be cases where the margin for transactions other than options on JGB futures is insufficient due to market fluctuations, and the opposite transaction may be executed through the liquidation system. In addition, in the event of other events of forfeiture of the benefit of time under the terms and conditions of the contract, the open interest in JGB futures options may be settled even if the event did not occur in relation to JGB futures options transactions. In such a case, you will be liable for any losses incurred in the settlement.
In the event of counter-purchase or sale through the liquidation system, or in the event of other events of forfeiture of the benefit of time according to the provisions of the written agreement, all or part of the open interest may be settled with losses incurred. Furthermore, in such cases, you will be liable for any losses incurred in such settlement.
Financial instruments exchanges may take regulatory measures such as raising the amount of margin when an abnormality in trading occurs or is likely to occur, or when deemed necessary from the viewpoint of settlement risk management of financial instruments clearing organizations. Therefore, in the event of a margin shortage, we ask you to check your account status daily to eliminate the margin shortage caused by the opposite transaction of commodities held by you through the liquidation system.
The seller must respond to any allotment of rights upon receipt of such allotment.
The provisions of Article 37-6 of the Financial Instruments and Exchange Act do not apply to JGB futures and options transactions.
In the event of sudden market fluctuations or failure to execute the entire quantity of opposite orders, the liquidation system may not be able to limit losses to within a certain range. In such cases, daily losses may be greater than anticipated.
In the event of counter-purchase or sale through the liquidation system, or in the event of other events of loss of time and profit according to the terms and conditions, part or all the open interest may be settled with a loss. In such cases, you will be liable for losses incurred in such settlement.
The liquidation system monitors the margin requirements of our clients in real time during trading hours. If a client falls short of margin, the Company will, at its own discretion, reverse trade the commodity held by the client until the margin shortage is resolved. In such a case, the Company may reverse trade the commodity held by the client without notice to the client, and the client shall bear any losses incurred because of such reverse trade.
Although reverse trades will be executed in the order and in the commodities designated by the Company, it is also possible for clients to designate the commodity in which reverse trades will be executed last. However, even if the client specifies the commodity, the reverse transaction may not necessarily be executed in the order specified by the client due to the client's account conditions, and the reverse transaction may be executed in the order determined by the Company.
In the event of liquidation, normal transaction fees as described in the "Fee Guidelines" set forth separately will be charged.
The liquidation system monitors in real time the margin balance in the client's account during trading hours. Therefore, while it is possible to quickly eliminate margin shortfalls caused by market fluctuations, it may not be possible to limit losses to a certain range in the event of sudden market fluctuations. In such cases, losses may be greater than anticipated. Therefore, it is essential for clients to check their account status on a regular basis and take necessary actions in advance.
We consider your entire portfolio to be subject to risk management. Therefore, when we detect an instrument that falls below margin, we immediately execute the best trade to avoid that risk. The target is determined by the execution rate considering "market liquidity", "price," of the target instrument.
The following are the standards for CFDs on securities
The following is a summary of our covered business partners.
Trade name: Interactive Brokers (U.K.) Ltd. （Interactive Brokers (U.K.) Limited.)
Location: Level 20 Heron Tower, 110 Bishopsgate, London EC2N 4AY
Specifically, the following may be the case
Interactive Brokers Securities Japan Inc ("IBSJ") Multi Currency Account allows you to trade foreign market derivatives in a number of foreign currencies. The base currency for the multi-currency account is Japanese Yen. The foreign exchange transactions are spot transactions.
IBSJ does not support deposits and withdrawals in all currencies of products that can be converted from the IB platform, but only some currencies (hereinafter referred to as "currencies handled" *). Currencies that cannot be deposited or withdrawn will need to be converted to the currencies that are handled by the IB platform. We may also perform foreign exchange transactions necessary to satisfy obligations to IBSJ incurred in a particular currency (e.g., those resulting from financial instrument transactions).
Please refer to the FAQs for the types of currencies handled. IBSJ's obligations to its clients are as follows
Foreign currency and international derivatives trading involves high risk and requires specialized knowledge. To qualify for a multi-currency account with Interactive Brokers, you must be aware of and understand the risks associated with trading foreign market derivatives and currencies and have sufficient financial resources to bear such risks.
Exchange rates between foreign currencies can change rapidly due to various economic, political, and other conditions and the client may be exposed to the risk of exchange rate losses in addition to the inherent risk of loss arising from trading in the underlying financial instrument. If a client deposits funds in one currency and trades instruments denominated in a different currency, the client's gain or loss on the underlying instrument may be affected by fluctuations in exchange rates between currencies.
When a client uses the foreign exchange facility provided by Interactive Brokers to buy or sell foreign currency, fluctuations in the exchange rate between the foreign currency and the base currency may result in significant losses, especially when converting back to the base currency.
When you enter into a foreign exchange transaction with Interactive Brokers, Interactive Brokers acts as a counterparty to your transaction, either through an affiliate of Interactive Brokers, another client who enters quotes into Interactive Brokers' system, or through a third-party bank (Interactive Brokers' "Forex Provider") as a counterparty to your trade. In such transactions, the Forex Provider is not acting in a financial advisor or fiduciary capacity to you or Interactive Brokers but is the counterparty to Interactive Brokers' offsetting transactions in an independent contractual transaction. Forex providers may take a substantial position in a foreign currency transaction entered by a client, make a market in it, or buy or sell similar or economically related instruments. In addition, Interactive Brokers' Forex providers may engage in proprietary trading, including hedging transactions, in connection with your foreign exchange transactions with Interactive Brokers, which may adversely affect the market price or other factors underlying the foreign exchange transaction you have entered into, and thus may adversely affect the value of such transactions.
The market conditions may prevent you from trading as you intend. For example, if the market price has reached the price limit, the market will be settled by resale or repurchase. Even if you wish to do so, it may not be possible. The price limits may be increased by overseas financial instruments exchanges depending on market conditions. In such cases, daily losses may be greater than anticipated.
Interactive Brokers Securities Japan Inc ("IBSJ") Multi Currency Account allows you to trade foreign market derivatives in a number of foreign currencies. The base currency for the multi-currency account is Japanese Yen. The foreign exchange transactions are spot transactions.
IBSJ does not support deposits and withdrawals in all currencies of products that can be converted from the IB platform, but only some currencies (hereinafter referred to as "currencies handled "*). Currencies that are not available for deposit or withdrawal must be converted to the currencies handled by IBSJ. We may also perform foreign exchange transactions necessary to satisfy obligations to IBSJ incurred in a particular currency (e.g., those resulting from financial instrument transactions).
Please refer to the FAQ for the types of currencies handled.
IBSJ's obligations to its clients are as follows:
Foreign currency and international derivatives trading involves high risk and requires specialized knowledge. To qualify for a multi-currency account with Interactive Brokers, you must be aware of and understand the risks associated with trading foreign market derivatives and currencies and have sufficient financial resources to bear such risks.
When a client uses the foreign exchange facility provided by Interactive Brokers to buy or sell foreign currency, fluctuations in the exchange rate between the foreign currency and the base currency may result in significant losses to the client, including losses when the client converts the foreign currency back to the base currency.
When you enter into a foreign exchange transaction with Interactive Brokers, Interactive Brokers acts as a counterparty to your transaction, either through an affiliate of Interactive Brokers, another client who enters quotes into Interactive Brokers' system, or through a third-party bank (Interactive Brokers' "Forex Provider") as a counterparty to your trade. In such transactions, the Forex Provider is not acting in a financial advisor or fiduciary capacity to you or Interactive Brokers but is the counterparty to Interactive Brokers' offsetting transactions in an independent contractual transaction. The Forex Provider may take a substantial position in a foreign currency transaction entered by you, make a market in it, or buy or sell similar or economically related instruments. In addition, Interactive Brokers' Forex providers may engage in proprietary trading, including hedging transactions, in connection with your foreign exchange transactions with Interactive Brokers, which may adversely affect the market price or other factors underlying the foreign exchange transaction you have entered into, and thus may adversely affect the value of such transactions.
The provisions of Article 37-6 of the Financial Instruments and Exchange Act do not apply to foreign market derivatives transactions.
Disclosures