Hi all, long time lurker first time poster.
Can anyone find a flaw in the following? I'm not a forex trader and I may be doing this long way but perhaps some one can help?
With the $CDN almost at par with the $US, I wanted to exchange some $CDN to $US and hold it till I was in the money trading it back. I don't want to be ripped of by the banks or currency exchange agencies so this is my following idea..
1) Open an account with Interactive Brokers and $CDN as my base currency.
2) Fund the IB account in $CDN and convert it to $USD. They charge $2.50 minimum or 1 basis point. (http://www.interactivebrokers.ca/en/p.php?f=commission) CHEAP!
3) Sit on the $US till i'm comfortably in the money and $CDN is down...while paying the $3 a month inactivity fee.
4) Convert the $USD back to $CDN using IB.
5) Wire the $CDN back to my bank account and pay the $12 wire fee.
6) Close IB account..
7) ??? Will it work???
Say i'm converting 10K... therefore the cost of doing all this would be the conversions ($6) + Wire transfer fee ($12) + 3 months of inactivity (5x3=$15).
So it would cost me $27 to convert $10,000 CDN to $ US and back to $CDN within 3 months. This would be much cheaper than going to the bank?
Is there something i'm missing?
Thanks!
Can anyone find a flaw in the following? I'm not a forex trader and I may be doing this long way but perhaps some one can help?
With the $CDN almost at par with the $US, I wanted to exchange some $CDN to $US and hold it till I was in the money trading it back. I don't want to be ripped of by the banks or currency exchange agencies so this is my following idea..
1) Open an account with Interactive Brokers and $CDN as my base currency.
2) Fund the IB account in $CDN and convert it to $USD. They charge $2.50 minimum or 1 basis point. (http://www.interactivebrokers.ca/en/p.php?f=commission) CHEAP!
3) Sit on the $US till i'm comfortably in the money and $CDN is down...while paying the $3 a month inactivity fee.
4) Convert the $USD back to $CDN using IB.
5) Wire the $CDN back to my bank account and pay the $12 wire fee.
6) Close IB account..
7) ??? Will it work???
Say i'm converting 10K... therefore the cost of doing all this would be the conversions ($6) + Wire transfer fee ($12) + 3 months of inactivity (5x3=$15).
So it would cost me $27 to convert $10,000 CDN to $ US and back to $CDN within 3 months. This would be much cheaper than going to the bank?
Is there something i'm missing?
Thanks!
