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DNB Trade®

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Managing negative account value

How interest is calculated?

DNB charges margin financing interest for clients holding margin positions and/or negative cash balances as established in General Business Terms.

For this purpose DNB operates with a key figures referred to as Net Free Equity (NFE) and Account Value. NFE and Account value is calculated daily at 17:00 New York time and paid/charged based on this number.

A positive NFE and/or Account Value mean that DNB will pay the client interest. A negative NFE and/or Account Value mean that DNB will charge the client interest.

Net Free Equity is calculated on your main account:

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

Account Value is calculated on 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.

How to monitor NFE and Account values?

NFE , Account Value and interest accrued can be found on DNB Trade platforms: Account > Interest Details.

Account value is provided under NFE column.

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

How you might have insufficient or negative cash balance?

Pay attention that this is non-exhaustive list!

Scenario 1 - One account, subscriptons and/or other fess

If you have only one main account on DNB Trade platform and you have active market data subscriptions or you use additional serivces such as Equity Research platform, you are charged monthly subscription fees. If your cash balance becomes negative due to these fees, interest will be cahrged.

Scenario 2 - One account, margin trading

If you have only one main account on DNB Trade platform and you trade margin instruments there is a high level of risk to your capital with a possibility to lose more than your initial investment, therefore your account balance might become negative and interest will be charged.

Scenario 2 Main account with multiple sub-accounts, trading any instruments

Usually negative cash balance is a result of buying or selling financial instrument from the account or sub-account, which has insufficient cash for a relevant transaction. How could this happen?

Let's say you have 10 000 EUR on your main account and 1 000 USD on your sub-account. If you place buy stock order with nominal value of 10 000 USD and you will choose to book this trade in USD sub-account, your trade will be executed and your USD sub-account balance will become negative: 1 000 USD - 10 000 USD = -9 000 USD and you interest will be charged.

Your main EUR account will stay untouched with positive 10 000 EUR. Why? This is because DNB Trade platforms do not execute automatic currency conversions between different accounts and sub-accounts.

Why my order was not cancelled in the first place if I had insufficient funds on USD account? Because there was enough collateral, in this case cash, on your main EUR account.

Scenario 3 Main account with multiple sub-accounts, insufficient cash on main account

If you have your main account with insufficient funds to cover NFE requirements and you trade on your sub-accounts, interest will be charged.

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

How to cover insufficient or negative cash balances?

There are two ways:

  1. You could fund your insufficient or negative account via bank transfer in relevant currency. For example:  if your DNB Trade USD account is negative, transfer USD to DNB Trade account. Since there is no automatic conversion, your USD deposit will be booked to USD account.
  2. Request manual currency conversion via:
    • Chat on DNB Trade platforms or
    • DNB Internet Bank: Letters > New Letter > Question fo the bank

How to avoid negative cash balance?

If you have opened one or more subaccounts, we highly recommend double checking the account on the Trade Ticket every time you place an order:

Placing an Order

  1. Click to select an account, where your trade will be booked. Full nominal value will be paid ONLY from the selected account. If there is insufficient funds in selected account, you will end up with negative account/sub-account value and interest will be charged.

If you have only one main account, it is unlikely that above mentioned scenario would occur to you, but if you trade on margin, there is a high level of risk to your capital with a possibility to lose more than your initial investment, therefore your account balance might become negative and interest will be charged.

How to monitor your cash balance?

TraderGO Account Balance

  1. Click to choose between different accounts. Default is overview account which indicates aggregate information from all your accounts converted into your main account's currency. Usually EUR or USD.
  2. Click "i" icon to see more details on selected account.

If you have only one account with DNB Trade, you can select "i" to see cash, transactions not booked and cash available information.

If you have multiple accounts with DNB Trade, first choose exact account or sub-account and then click "i" to see information on selected account.

Account Information

  1. Cash balance - is your current cash on the account
  2. Cash available - is cash available to you for trading. Cash available = Cash balance - Transactions not booked. Transactions not booked, are payments which are not yet settled.