What is changing with ONB fees at TradeZero, and what do I need to know?

TradeZero is changing our Overnight Borrow (ONB) fee billing methodology on August 1, 2025. What is changing?

On August 1, 2025, we are changing how we calculate ONB fees, moving from billing on a trade date (T/D) basis to a settlement date (S/D) basis. This change better reflects industry practice and market mechanics.

Before August 1, 2025 (T/D-Based Billing):

· ONB fees were charged overnight at the end of the date when you opened a short position (T/D).

· Fees stopped the day you closed the short position (T/D).

· Example: If you shorted on Monday and covered on Tuesday, you were charged one day of ONB (Monday only).

On and after August 1, 2025 (S/D-Based Billing):

· ONB fees will be charged starting the day the short sale settles i.e., the business day after the day of the trade, referred to as the “settlement date” (S/D).

· Fees stop on the settlement date of the buy-to-cover trade i.e., the business day after you close the short.

· Using the same example: If you short on Monday and cover on Tuesday, you are still charged one day of ONB fees, however, you are charge for Tuesday instead of Monday.

This new billing methodology improves fairness, sustainability and better reflects actual market mechanics.

What does this mean for my Overnight Borrow costs?

The change is more about timing than absolute costs. Under the new model, you are charged based on settlement date quantities, not trade date quantities. However, the change can affect your costs, particularly when holding shorts overnight around weekends and holidays, particularly on Thursdays.

For example:

Before August 1 (T/D-Based Billing):

· Example 1: If you shorted on Thursday and covered on Friday, you were charged one day of ONB (Thursday only).

· Example 2: If you shorted on Friday and covered on Monday, you were charged for three days of ONB (Friday, Saturday and Sunday).

After August 1 (S/D-Based Billing):

· Example 1: If you short on Thursday and cover on Friday, you are now charged for three days of ONB fees (Friday, Saturday and Sunday because your closing trade on Friday doesn’t settle until Monday).

· Example 2: If you short on Friday and cover on Monday, you are now charged one day of ONB (Monday only).

The two examples above illustrate how the change from T/D basis to S/D basis can affect the number of days for which you are charged ONB fees. While it is net neutral, it is important to understand how this timing difference could affect your fees.

When does the change take effect?

The new billing methodology will apply to all short positions held overnight starting August 1, 2025.

Do I need to do anything?

No action is required. The change will be applied automatically. You’ll see ONB fees reflected based on settlement dates in your daily statements starting August 1.

What are Overnight Borrow Fees (ONB)?

Short selling involves selling shares you don’t own with the intention of buying them back later at a lower price.

When you hold the short position overnight, we must borrow those shares on your behalf in order to deliver them on settlement to the person who bought them — and that comes at a cost. The ONB is a fee charged by brokers to cover the cost of borrowing those shares from the market while your short position remains open.

Will I be charged an ONB fee if I short and cover the same day?

No. When you open and close a short position on the same trading day, there is no settlement obligation the next day as your buy and sell offset. Since no borrow occurs, no borrow fee is charged.

Who can I contact with questions?

If you have any questions or would like to understand how this change affects your specific trading strategy, please contact our support team at support@tradezero.ca or visit tradezero.com/en-ca to start a Chat; we’re here to help 24/7.