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Old Mar 12th, 2012, 02:46 PM   #1
Shifty
 
 
Join Date: Mar 2012
Posts: 3
I am looking at my IB annual statement trying to figure out my FX P&L for last year. Could someone tell me how to read this statement? Just looking to get the net gain in USD to report on my tax return. My base currency is USD. Each currency shows sales and purchases in that currency but not in USD. I assume the answer is somewhere in the "Change in Position Value" section. That section also includes my stock and futures trades.

I won't be trading forex with IB again. This is too much trouble. Other brokers give you P&L in USD.
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Old Mar 12th, 2012, 03:09 PM   #2
Stok
 
 
Join Date: Sep 2003
Location: Dallas
Posts: 803
Yes, it is nightmare. I keep all my FX trades logged in excel to the penny...Still amazes me IB has yet to find a way to give us our FX PL to the penny each year. It's a black hole.
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Old Mar 12th, 2012, 04:11 PM   #3
N54_Fan
 
 
Join Date: Sep 2011
Posts: 388
This is what i was eluding to in the other thread that I posted. No one responded so I assumed no one understood what I meant.

When you close out a position you are paid your profits in the settlement currency (also called quote currency which is the bottom of the pair.) This means that the profit you have will be at risk to market fluctuations. So the amount of CAD or CHF or JPY that you have in earnings will never be to the penny until you convert it back to USD. I suspect from what you are saying that you have money still in these foreign currencies. You would need to BUY USD/CHF to clear out your CHF and likewise for other foreign currencies.

Is this what you were referring to?

My question was how often do most people "zero out" this foreign currency into USD? I was thinking of doing this once a month or so.
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Old Mar 12th, 2012, 04:17 PM   #4
Shifty
 
 
Join Date: Mar 2012
Posts: 3
N54, That is not what I was referring to but that may be the easiest way to figure my gains. I always converted the foreign currencies to USD after closing the trade. I will look back at those conversion transactions to determine my P&L. Thanks.
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Old Mar 12th, 2012, 04:25 PM   #5
Stok
 
 
Join Date: Sep 2003
Location: Dallas
Posts: 803
Quote:
Quote from N54_Fan:

This is what i was eluding to in the other thread that I posted. No one responded so I assumed no one understood what I meant.

When you close out a position you are paid your profits in the settlement currency (also called quote currency which is the bottom of the pair.) This means that the profit you have will be at risk to market fluctuations. So the amount of CAD or CHF or JPY that you have in earnings will never be to the penny until you convert it back to USD. I suspect from what you are saying that you have money still in these foreign currencies. You would need to BUY USD/CHF to clear out your CHF and likewise for other foreign currencies.

Is this what you were referring to?

My question was how often do most people "zero out" this foreign currency into USD? I was thinking of doing this once a month or so.
I zero out after each non-base currency trade. It's somewhat a pain, but out of the 5 pairs I trade, only 2 are non-base. If not, you are exposed to market flux and interest rate flux.
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Old Mar 12th, 2012, 04:37 PM   #6
Shifty
 
 
Join Date: Mar 2012
Posts: 3
Quote:
Quote from N54_Fan:

This is what i was eluding to in the other thread that I posted. No one responded so I assumed no one understood what I meant.

When you close out a position you are paid your profits in the settlement currency (also called quote currency which is the bottom of the pair.) This means that the profit you have will be at risk to market fluctuations. So the amount of CAD or CHF or JPY that you have in earnings will never be to the penny until you convert it back to USD. I suspect from what you are saying that you have money still in these foreign currencies. You would need to BUY USD/CHF to clear out your CHF and likewise for other foreign currencies.

Is this what you were referring to?

My question was how often do most people "zero out" this foreign currency into USD? I was thinking of doing this once a month or so.
NB54, That is not what I was referring to but that may be the easiest way to determine my P&L. I zero out the foreign currencies after every trade. By adding up all of those currency conversions it should give me the total. Is there ever a case where I would have USD left over after closing a trade?
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