Why do brokers charge an auto square-off fee?

Brokers charge this fee because closing a position that wasn’t voluntarily exited involves additional operational work on their end, monitoring the account near the cut-off, executing the trade, and in some cases managing risk from a margin shortfall that triggered the square-off in the first place. It also acts as a deterrent, nudging traders to manage their own exits rather than relying on the broker’s system as a default. The fee amount and whether it applies varies by broker and by the reason for square-off (time-based cut-off versus a margin call), so you check the specific tariff sheet rather than assuming a standard rate across all brokers. Since this fee is entirely avoidable by closing your own positions before the cut-off, you treat it as one of the more controllable costs in your trading, unlike statutory charges you can’t do anything about.