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This is a discussion on Interactive Brokers within the Brokerages forums, part of the Commercial category; HI ALL, i just opened a euro account with IB,im trading us equities and i was under the impression that ...

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Old Apr 21, 2008, 10:29pm   #953
Joined Jan 2008
HI ALL,

i just opened a euro account with IB,im trading us equities and i was under the impression that when a trade was closed the profit or loss was automatically changed into the base currency, so imagine my surprise and horror when i discovered today that i was unknowingly holding a negitive dollar balance all bloody weekend!!

IB are very good but TWS is the work of satan and i dont think even einstein could figure it all out.

can someone please tell me if i need to manually convert back to base currency after every trade, im very greatfull for any advice, thanks.
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Old Apr 21, 2008, 10:35pm   #954
 
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Joined Sep 2003
Leave your balance alone. You will accumulate positive or negative balances in various currencies and pay or be paid interest at the appropriate rate (you are only paid when over 10,000). Most of us just let it run and convert when there is a reason.

I wouldn't worry about a negative balance (calculate the interest to figure out if it concerns you) but if you are then just convert a larger amount of money to that currency now so that you can cover any negative USD balance. On the other hand, you can just make a few good trades
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Old Apr 21, 2008, 10:45pm   #955
Joined Jan 2008
HI NINE,

Thanks for the advice,but am i not leaving myself open to currency exchange risks by having loads of loose ends hanging around so to speak.
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Old Apr 21, 2008, 11:52pm   #956
 
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You will pay a lot for small adjustments but its your choice.

FWIW you have a 50% chance that currency will fluctuate in your favour.
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Old Apr 22, 2008, 8:23pm   #957
gc1
Joined Jun 2005
Or, write yourself a spreadsheet to recalculate the offsetting position to avoid small currency amounts (only works for those pairs where one side is your main currency).

E.g. if your main currency is EUR and you are trading EUR/USD, as an example:

A 500,000 buy at say 1.5900 could be offset with a sell of 499,058 at 1.5930 or 500,945 at 1.5870 (or other figures in between), realising a P/L in EUR instead of USD.

Similarly for USD/JPY or USD/CHF etc. if you want to realise the P/L in USD instead of JPY or CHF recalculate the appropriate offsetting position.

Gets more complicated for scaling-in and scaling out etc. but still relatively easy to do.
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Old Apr 26, 2008, 12:32pm   #958
Joined Nov 2005
Margin relief

my understanding is that IB have a margin requirement of 25% on US stocks


Do IB give margin relief if a customer holds a balanced portfolio of longs and shorts?

If IB do give margin relief on US stocks (for long/short portfolios), how much? and how is it calculated?


cheers
belflan
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Old Apr 26, 2008, 12:43pm   #959
Joined Nov 2004
50% for overnight hold. 25% intraday. Which I believe is Reg T margin.

For accounts > 100K (or something like that) they offer "portfolio margin". The rules are complicated and I don't pretend to understand them, but do not necessarily give lower margin requirements on mixed long/short portfolios - it depends on instrument volatility I think.
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