INTEREST CHARGES IN MARGIN ACCOUNTS
The annual rate of interest which Penson Financial Services, Inc charges on your average net debit balance is determined by their cost of borrowing money. The rate is related to short-term money market instruments; however, it is not tied directly to any standard such as the prime rate or the broker call money rate. The rate is set and reset solely at Penson Financial Services, Inc's discretion.

HOW INTEREST IS CALCULATED
Interest on margin accounts is computed on a daily average basis on the net debit balances. Each days debit balance is accumulated into a monthly total. The total debit balance in the period is then averaged to determine the debit balance on which interest is charged. An offsetting credit balance in a cash account serves to reduce this total. The normal interest period ends on the last day of the month. Interest is computed by multiplying the average daily debit balance by the average interest rate (1/360 of the annual interest rate) times he number of days in the interest period.

If during any interest period there is a change in interest rates applicable to your account, interest charges at the different rates will be averaged to determine the rate of interest to be charged on the debit balance.