Currency exchange on IB

Discussion in 'Forex' started by panaceus, Mar 26, 2010.

  1. panaceus



    Newbie question: I'm considering opening an IB account to trade equities on the LSE. Can anyone walk me through exactly how to convert $10K to GBP on their platform? I'm not trying to speculate, just make the conversion, and I'm wary of doing something terribly wrong since I have no forex experience. Also, how much of a penalty would I incur using the IDEAL network rather than IDEAL PRO?

    Any advice would be greatly appreciated.
  2. just21


    You automatically borrow the other currency when you buy anything not in your base currency, assuming you have a margin account. The margin rate is about 1.6% a year.
  3. moarla


    correct. and if you dont want that, you can change your base currency on account management.
  4. panaceus


    Thanks, guys. What if I have a cash account, with the base currency set to USD?
  5. just21


    The minimum for idealpro is higher. The rate on ideal is still better than any bank will give you. Call up gbpusd and lift ask.
  6. moarla


    you can trade every symbol in every currency without doing anything, or you change your base curr..
  7. if you want to transform your cash into other currency, for example turn usd into euro.. put EUR in the screen select IDEAL. This is the euro underlying, so you would buy euro by buying the ask.
    tis wil have a commission though of 2,50 USD minimum

    apparently idealpro is cheaper, but you need over 25k to use that
  8. panaceus


    Excellent. Thanks to everybody for responding so quickly.
  9. Had 1 Auto strategy late last sunday in which a partial fill GBPUSD Idealpro caused the residual 10,000 to be re-routed to
    Ideal platform. The residual got filled, took 2 seconds and had
    3 pips of slippage. Asian session on Sunday eves. definately have wider spreads so I cannot tell you if the market moved or if
    this is common for Ideal, probably the latter. I did find out that minimum for GBPUSD on Idealpro is 17,000.

    Beyond your inquiry and others should be aware that no matter what size you post on Idealpro, if you do get patial fills and the residual falls below 17,000 ex. GBPUSD your order will automatically be re-routed. Each Forex pair has it's own minimum and they were recently changed March 1 by IB.
  10. panaceus


    I just had a look at the "Base Currency" page on IB

    which says,

    "If the client elects to maintain a cash account then they are restricted to holding cash balances and positions denominated solely in their designated base currency. Clients maintaining a margin account may change their base currency at any time through Account Management and may effect deposits or withdrawals in a non-Base currency."

    This seems to indicate that I'd need a margin account to do what I'm attempting. Which I don't have a problem with, provided I can ensure that I'm not accidentally borrowing currencies when I mean to be exchanging them--I'm just more comfortable in cash.

    Anyone have a final word on this?
    #10     Mar 26, 2010