I am not subject to IRS taxation hence do not know. If I understand US tax code correctly then as long as you claim US domicile or are US citizen you are subject to taxation on any income earned through any means,so it does not matter whether that income was earned in the US or abroad, off US listed securities or foreign ones, interest, dividends, capital gains, or what have you. Of course the devil is in the details, such as long term capital gains classifications, numerous exceptions, examptions, and other irregular treatment.
I wouldn't do a EM carry trade via IB. MXN/RUB/NZD are doable without the IB rate haircut. Know any way/product I can carry a mil USD in BRL or ZAR without subject to the discount? structured note not for me as duration typically too long. Just looking to put some cash into carry over my summer holidays
You are talking about the official rate spreads, but IB will be carrying your carry with its 4% harcut
If you want to earn higher rates in foreign currencies, you can go long the related currency futures, whose prices account for interest rate differentials. It's not an arbitrage, since if spot currency rates fall, the futures will fall along with them.
I see the first four listed at https://www.interactivebrokers.com/en/index.php?f=2222&exch=globex&showcategories=FUTGRP .
Fellow traders, me with IB too, trading US options, currently HKD gets only 0.183% (BM - 0.75%) just now right? my Hongkong HSBC account pay 0.125%. so l may just convert my idle HKD into USD, which enjoys ~10x the interest. thoughts?
Crazy how the rates are all over the place in HK, a few days ago it was paying around 1%, and some of you have seen it over 3% for a few days recently. Any idea why ? Hibor 1 month hasn't moved that much during that period : https://www.hangseng.com/en-hk/personal/mortgages/reference-rate/historical-hibor/ Hasn't the HKMA read the memo from Stockolio that interests rates in HK are going through the roof ?