# Interactive Brokers: Liquidation Warning

**URL:** <https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517>\
**Category:** Investing / Brokers\
**Created:** [June 6, 2022, 2:09pm UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517 "2022-06-06T14:09:53Z")\
**Posts on this page:** 20\
**Page:** 1

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**Author:** ![Bojack](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/bojack/32/281_2.png) [@Bojack](https://forum.mustachianpost.com/u/Bojack)\
**Post date:** [June 6, 2022, 2:09pm UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/1 "2022-06-06T14:09:53Z")

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Hey guys, something strange has happened to my IB account today, and I wonder if anyone could help to explain. This morning I got an email from IB:

> **Liquidation Warning**
> 
> Excess Liquidity URGENT: Please note that the qualifying equity within your account (i.e., Equity with Loan Value) is insufficient to satisfy the margin requirement and, to restore margin compliance, liquidation of positions may commence without further notice.
> 
> _ **Note:** _ Cash accounts are subject to liquidation if assessed a fee in excess of the cash balance on hand and may therefore receive this notice if their cash balance is \< 5% of the market value of securities held.

I just logged into IB in the afternoon and saw that this “liquidation” has actually taken place:

 ![image](https://forum.mustachianpost.com/uploads/default/original/2X/f/f81813a8c286af937dffef79ab434e7adc048de1.png)

So for some reason it automatically sold 1 USD.CHF, then it sold 2 USD.CHF, and then finally it sold 1 TSLA share. I don’t like this. Why did this happen? To my knowledge, before this, I had a cash position of around 3 USD and 0 CHF. But it looks as if I had a negative CHF balance and he tried to fix that? I can’t find the right report to show me something like a currency balance history. I have a cash account.

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**Author:** ![tarioch](https://forum.mustachianpost.com/letter_avatar_proxy/v4/letter/t/22d042/32.png) [@tarioch](https://forum.mustachianpost.com/u/tarioch)\
**Post date:** [June 6, 2022, 2:22pm UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/2 "2022-06-06T14:22:22Z")

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Sounds like there was a fee in chf, maybe check the activity report.

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**Author:** ![Bojack](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/bojack/32/281_2.png) [@Bojack](https://forum.mustachianpost.com/u/Bojack)\
**Post date:** [June 6, 2022, 2:26pm UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/3 "2022-06-06T14:26:40Z")

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Some info from the activity statement for May:

 ![image](https://forum.mustachianpost.com/uploads/default/original/2X/5/5ec75e02b687b23370f38a3306f458d00f43fc7c.png)

 ![image](https://forum.mustachianpost.com/uploads/default/original/2X/4/48c1f5699fa3878b10b6be2b27e514138cbb6b1d.png)

 ![image](https://forum.mustachianpost.com/uploads/default/original/2X/7/7a7b16d3eb3901f08ff0fabc9ba9fee2448f8570.png)

So yes, in May there was a CHF interest of 1.98 for April, then in June there was 2.02 for May. Eventually I had no cash left in the account, so it automatically sold 1 TSLA share.

But my CHF cash is 0, so what gives? Why is there a fee being charged each month?

Edit: I think I had over 100’000 CHF cash in the account for a few days in April. Could this interest be charged on this CHF? And then the June interest was charged because I had negative CHF in the account?

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**Author:** ![REandSTOCK](https://forum.mustachianpost.com/letter_avatar_proxy/v4/letter/r/7ea924/32.png) [@REandSTOCK](https://forum.mustachianpost.com/u/REandSTOCK)\
**Post date:** [June 6, 2022, 3:22pm UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/5 "2022-06-06T15:22:39Z")

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> [@CHRad](#):
>
> But the fact that they liquidate assets over like 1$ in a portfolio which is probably a couple 100K/1+M in your case is hilarious.

He has a cash account, that is why

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**Author:** ![Cortana](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/cortana/32/2082_2.png) [@Cortana](https://forum.mustachianpost.com/u/Cortana)\
**Post date:** [June 6, 2022, 3:25pm UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/6 "2022-06-06T15:25:09Z")

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Why don’t you have a margin account?

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<div class="post-metadata">

**Author:** ![Bojack](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/bojack/32/281_2.png) [@Bojack](https://forum.mustachianpost.com/u/Bojack)\
**Post date:** [June 6, 2022, 3:33pm UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/7 "2022-06-06T15:33:39Z")

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Because when I created the account, I chose the cash option, as I thought the margin account is more advanced. I didn’t change it since. Moreover, I wanted to avoid any potential mistakes on my part, like making an FX trade that creates a negative open position or something. IB interface is unintuitive enough to make you doubt in what is the actual status of your account. There is the available cash and the settled cash, the realized and unrealized performance, the virtual FX positions, etc etc.

In hindsight, I would have gone with a margin account. A few times I wanted to buy some stock because the price was right, but I needed to send the money first. It surely cost me a few thousand.

OK, so I was charged 1.98 CHF interest in April because I had a large CHF cash position for a couple of days, before I bought some stock. But why was I charged again 2.02 CHF in May? Was I this time charged for having a -1.98 CHF balance throughout entire month? I made no transfers/orders in May.

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**Author:** ![Cortana](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/cortana/32/2082_2.png) [@Cortana](https://forum.mustachianpost.com/u/Cortana)\
**Post date:** [June 6, 2022, 4:00pm UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/8 "2022-06-06T16:00:26Z")

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> [@Bojack](#):
>
> In hindsight, I would have gone with a margin account. A few times I wanted to buy some stock because the price was right, but I needed to send the money first. It surely cost me a few thousand.

Switching is easy and fast. I also started with a cash account and changed it to margin later.

Makes life so much easier.

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**Author:** ![FunnyDjo](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/funnydjo/32/3216_2.png) [@FunnyDjo](https://forum.mustachianpost.com/u/FunnyDjo)\
**Post date:** [June 6, 2022, 5:35pm UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/9 "2022-06-06T17:35:44Z")

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I always keep 2kchf and usd just in case I need to pay some fees

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<div class="post-metadata">

**Author:** ![Bojack](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/bojack/32/281_2.png) [@Bojack](https://forum.mustachianpost.com/u/Bojack)\
**Post date:** [June 6, 2022, 6:19pm UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/10 "2022-06-06T18:19:02Z")

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Me too, but my last purchase was really razor-thin close to my balance, so I was left with almost nothing.

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**Author:** ![Gesk](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/gesk/32/3303_2.png) [@Gesk](https://forum.mustachianpost.com/u/Gesk)\
**Post date:** [June 7, 2022, 5:42am UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/11 "2022-06-07T05:42:31Z")

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Maybe the 2.02 CHF were from the $2 exchange fee?

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<div class="post-metadata">

**Author:** ![Bojack](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/bojack/32/281_2.png) [@Bojack](https://forum.mustachianpost.com/u/Bojack)\
**Post date:** [June 7, 2022, 5:55am UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/12 "2022-06-07T05:55:21Z")

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The CHF 2.02 is a “CHF Credit Interest for May-2022”.

 ![image](https://forum.mustachianpost.com/uploads/default/original/2X/5/53b0a00806da5efa43bb4b403aabf8f19e7b2cec.jpeg)

What is “accrual reversal”?

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<div class="post-metadata">

**Author:** ![Gesk](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/gesk/32/3303_2.png) [@Gesk](https://forum.mustachianpost.com/u/Gesk)\
**Post date:** [June 7, 2022, 8:21am UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/13 "2022-06-07T08:21:36Z")

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If I understand correctly it’s when they actually charge the interests earned or to be paid to the cash balance.  
So it seems you were also charged some interest for May…

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<div class="post-metadata">

**Author:** ![Daniel](https://forum.mustachianpost.com/letter_avatar_proxy/v4/letter/d/3ec8ea/32.png) [@Daniel](https://forum.mustachianpost.com/u/Daniel)\
**Post date:** [June 7, 2022, 8:31am UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/14 "2022-06-07T08:31:29Z")

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The fee is almost certainly negative interest. That they would not send you a warning requesting you to add money to your account to cover the fees is disappointing/concerning. I guess the takeaway is to always keep some cash in the account to cover possible fees.

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<div class="post-metadata">

**Author:** ![Bojack](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/bojack/32/281_2.png) [@Bojack](https://forum.mustachianpost.com/u/Bojack)\
**Post date:** [June 7, 2022, 8:49am UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/15 "2022-06-07T08:49:18Z")

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I get why I got charged interest for April, it is even called “ **credit** interest” and not debit. Totally no idea about May. I made no transactions in May, apart from being charged with that negative interest. So for the most of May, my CHF balance has been -1.98. Still, on June 3 I was charged another CHF credit interest. I Just charged my account with a few hundred CHF and will keep it like this and see what happens in July. If they charge me again, I’ll open a ticket or sth.

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<div class="post-metadata">

**Author:** ![Cortana](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/cortana/32/2082_2.png) [@Cortana](https://forum.mustachianpost.com/u/Cortana)\
**Post date:** [June 7, 2022, 8:51am UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/16 "2022-06-07T08:51:34Z")

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Why not just switch to margin account and nevet bother again?

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<div class="post-metadata">

**Author:** ![Bojack](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/bojack/32/281_2.png) [@Bojack](https://forum.mustachianpost.com/u/Bojack)\
**Post date:** [June 7, 2022, 8:56am UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/17 "2022-06-07T08:56:53Z")

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With a margin account, I would still be charged interest for having too large position in CHF. And if my cash balance ran into negative, I would maybe not even know it until I got a warning. What is the maximum negative cash balance that you can have at IB?

You know, I do not intend to make any more trades on IB, just hold my stock there. So I don’t need the account to be more capable. At the same time I don’t want to screw sth up. IB does not let you know when some things happen, it just silently charges interest or some other fee, when you do something wrong. I don’t want to have to check it regularly if I didn’t miss out on something and now I’m strongly in the negative.

I surely wouldn’t like to keep a negative cash balance, so the margin account would maybe improve a bit on the situation, but still the best thing is to keep a few hundred bucks in cash, in order to cover any unexpected costs and not be liquidated.

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<div class="post-metadata">

**Author:** ![jmp](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/jmp/32/8768_2.png) [@jmp](https://forum.mustachianpost.com/u/jmp)\
**Post date:** [June 7, 2022, 9:20am UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/18 "2022-06-07T09:20:10Z")

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> [@Bojack](#):
>
> keep a few hundred bucks in cash

Even better: both in CHF and in USD ✌

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<div class="post-metadata">

**Author:** ![weirded](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/weirded/32/14916_2.png) [@weirded](https://forum.mustachianpost.com/u/weirded)\
**Post date:** [June 7, 2022, 11:23am UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/19 "2022-06-07T11:23:39Z")

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> [@Bojack](#):
>
> What is the maximum negative cash balance that you can have at IB?

You have to check in the account details, I think it is the Excess liquidity. With your assets it will be in the “hundreds of thousands” magnitude → nothing to worry about…

I currently have ca. -190 kCHF

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<div class="post-metadata">

**Author:** ![weirded](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/weirded/32/14916_2.png) [@weirded](https://forum.mustachianpost.com/u/weirded)\
**Post date:** [June 7, 2022, 11:29am UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/21 "2022-06-07T11:29:14Z")

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yeah well I did it mostly as a proof of concept in order to support your theories !  
So there are also forum members who can take some (measured ?! 🥶) risks and sleep at night 😂

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<div class="post-metadata">

**Author:** ![Bojack](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/bojack/32/281_2.png) [@Bojack](https://forum.mustachianpost.com/u/Bojack)\
**Post date:** [June 7, 2022, 11:30am UTC](https://forum.mustachianpost.com/t/interactive-brokers-liquidation-warning/8517/22 "2022-06-07T11:30:16Z")

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where is the account details section?

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