Margin Rates

Securities and Exchange Commission Rule 10b-16 requires a broker who extends credit to a customer in connection with any security transaction to furnish the customer specified information describing the terms, conditions and methods pursuant to which interest charges are made to customers' accounts. This statement is sent to you in conformity with that rule.

Interest will be charged on all accounts for any credit extended to or maintained for customers by the firm for the purpose of purchasing, carrying or trading in securities or otherwise. The annual rate of interest you will be charged may vary from a minimum of 1% to a maximum of 3% above the brokers' call money rate, depending upon the amount of your total debit balance. Current rates are as follows:

Debit Balance Interest to be Charged Above Brokers' Call Money Rate

In determining the debit balance and the resulting rate of interest, we will combine the margin account debit balances in all accounts, except Type 3 Short and Type 4 Income Accounts. Interest is then computed for each account based on the rate resulting from combining the accounts. Your rate of interest will be changed without notice in accordance with changes in the brokers' call money rate and in your debit balance. When your interest rate is to be increased for any other reason, you will be given at least 30 days written notice.

If brokers' call is expressed as a range, LowTrades may charge the high of the range. Your monthly statement will show the dollar amount of interest and the interest rate charged to your account. There will be no interest charge reflected on your statement if your monthly charge is less than $1.00.

All securities or other property held by us in any of your accounts are collateral for any debit balances. A lien is created by those debits to secure the amount of money owed to us. This means securities in any of your accounts can be sold to reduce or liquidate entirely any debit balances in your accounts, as authorized in your Margin Agreement.

If there is a decline in the market value of the securities which are collateral for your debits, it may be necessary for us to request additional margin. Ordinarily, a request for additional margin will be made when the equity in the margin account (the market value of the securities in the account in excess of the debit balances) falls below our margin maintenance requirements, which may change from time to time without notice. We retain the right to require additional margin any time we deem it desirable. Margin calls can be met by delivery of cash or additional securities.

Other Charges

Separate interest charges at an annual rate of 2 1/2% above brokers' call money rate may be made in the Type 1 Cash Account in connection with:

1. Prepayments (by approval only) - payments to a customer of the proceeds of a security sale before the regular settlement date
2. "When Issued" transactions - when the market price of the "when-issued" security    deteriorates from the customer's contract price by an amount that exceeds the customer's   cash deposit, interest may be charged on such excess
3. Late payments - payments for securities purchased which are received past settlement date

Interest Calculations

Interest on debit balances is computed by multiplying the daily debit balance of the account by the applicable interest rate in effect and dividing by 360. Interest charged during the interest period is the total of such daily computations. The daily debit balance of the account is the aggregate daily debit balance for all accounts other than your Type 4 Income and Type 3 Short Accounts.

Example (applicable interest rate 10%):

Date Balance Rate divided by 360 equals Interest

The total amount for this period appearing on your statement is $5.31.

Marking to the Market

The credit balance in the Type 3 Short Account will be decreased or increased in accordance with the corresponding market values of all short positions. Corresponding debits or credits will be posted to the Type 2 Margin Account. These entries in the Type 2 Margin Account will, of course, affect the balance on which interest is computed. Credits in your Type 3 Short Account, other than Marking to Market, will not be utilized to offset your Type 2 Margin Account balance for interest computation.