Interest on funds deposited at Luminor Trade

Interest on your main account is calculated on the Net Free Equity.

Interest on sub-accounts is calculated on the Account Value.

Since the Net Free Equity is calculated on open trade positions on all your accounts, it is important to make sure that sufficient cash is available on your main account.

Otherwise, you risk being subject to a debit interest on your main account exceeding the credit interest payable on your sub-account(s).

Net Free Equity definition

Net Free Equity is:

  • The cash balance on the main trading account
  • Plus or minus any unrealised profits or losses from open CFDs,FX Forwards and Futures on your main trading account
  • Plus the market value of any FX Options on your main trading account
  • Minus any margin required for financing open positions on your main trading account and sub-accounts.

 

Net Free Equity margin financing

Cash collateral for margin financing used in Net Free Equity calculations may differ from the trading margin requirement. See the full list of cash collateral for margin financing used for Net Free Equity calculation.

In order to avoid paying negative interest, enough cash has to be held on your main account and sub-accounts.

NFE and interest accrued can be found on Luminor Trade platforms "Account > Interest Details".

Account Value definition

Account value of your sub-account is:

  • The cash balance on the individual sub-account
  • Plus or minus the value of any unrealised profits or losses from open CFDs, FX Forwards and Futures and on the sub-account
  • Plus the market value of any FX Options on the sub-account
Pay attention, that main account value is described by NFE and subaccount value is described by Account Value.

Account Interest

The following interest rates apply to funds deposited with Luminor Bank:

Net Free Equity or Account Value above 15 000 EUR (or equivalent):

  • Interest paid on the full amount on the account is the higher of market bid rates minus 3% and zero

Positive Net Free Equity or Account Value up to 15 000 EUR (or equivalent):

  • No account interest

Negative Net Free Equity or Account Value:

  • Interest will be charged at market ask rates plus 8%, however never less than 8%

Information on NFE, Account Value and interest accrued can be found in Luminor Trade platforms: Account > Interest Details

Note! For Net Free Equity/Account Value above 15 000 EUR interest is not paid, if interbank market BID rate minus 3% is negative.

Interest Calculation and Settlement

Interest will be calculated daily at 17:00 New York time and settled monthly - within seven business days after the end of each calendar month.

Automatic conversion for trades

In case account currency does not match traded instrument currency, Luminor Trade will automatically execute currency conversion.

Currency conversions of trading costs as well as profits and losses from trading activities are done using the prevailing mid-spread close rate as of 17:00 New York time, plus/minus 0.5%. For FX Options the rate is plus/minus 0.1%.  

The Currency Conversion fee does not apply to margin collateral. Only settlement of actual payments to or from the trading account are included, for example, buying/selling cash Stocks, paying/receiving options premium etc.

The rate used for currency conversion of amounts booked to your account is shown in the trading platforms under the “Trades Executed” report.

No automatic conversion for negative account balances

In case, there will be negative cash balances in one or more trading accounts and there will be enough cash in another currency (and another account), Luminor Trade will NOT automatically execute currency conversion. See trading guidelines on avoiding negative cash balances.

Upon clients request, Luminor bank manually converts currency held in clients account as cash to other subaccounts (if such subaccounts exist). Currency conversion between client's subaccounts is executed at DNB bank commercial conversion rate - market price plus/minus 1%. Conversion rate may be improved if converting more thank 10 000 EUR equivalent.

Fee for reporting of U.S. Source Income

Fee for reporting of U.S. Source income is 90 USD. It is paid annually during Q2. Fee is debited from client's Luminor Trade account or from clients account at Luminor Bank. If client holds cash in different currency, currency conversion is executed. More information on fee for reporting of U.S. Source Income.