USD fluctuations

pollux75

Newbie
9 0
I have a bit of a stupid question. I'm living in the UK but only trading US stocks. As you can imagine, I've been hit hard by the USD fall. I'm currently trading with E*Trade and very happy with it, but I was wondering if it wouldn't be more convenient to trade with IB.
My understanding is that if your base currency is say GBP, when you buy a US stock, IB creates a margin loan. I might be a little bit thick, but I can't see any advantage over having a base currency in USD, so I don't think this would actually help, especially since I only trade in USD for the time being.

I think where an IB account might be useful is in that allows you to buy certain products like futures on the USD index I believe that would allow me to hedge my positions. Is my reasoning correct?

As you can see, I'm not very familiar with the forex markets. Your help is much appreciated.
 

JonnyT

Senior member
2,560 22
The advantage is that if you are a UK resident and day trade then every day you have pounds in your pocket.

If you have a USD base then you have lost 25% of the capital this year...

If you have a GBP base then you lose (or gain) nothing from USD fluctuations.

I have a GBP base....

JonnyT
 

pollux75

Newbie
9 0
JonnyT said:
The advantage is that if you are a UK resident and day trade then every day you have pounds in your pocket.

Thanks for your reply. I tend to keep my positions for longer than a day so I guess I wouldn't really gain much from it.
 

First Wave

Junior member
10 0
IB

I have been using IB for a year in the US, and have no complaints.

USD did put in a double bottom, with positive divergence Friday.
 
 
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