Diversifying in currencies on IB account

Discussion in 'Automated Trading' started by travis, Mar 4, 2013.

  1. travis


    Does anyone know how to manage IB's account currency so to diversify among different currencies? It might have something to do with IdealPro, but I don't remember exactly how to do it.

    So far I've only managed to have some euros, but they're from my GBL (German Bund) trades. I would like to ask you how to buy Euros, JPY, GBP.
  2. travis



    Problem solved:
  3. It is true that you can split your cash into many currencies.

    However, only USD cash can be used to buy US stocks and futures (except by borrowing and paying interest).

    Only Euro cash can be used to buy European stocks (except by borrowing and paying interest).


    So if you want to buy and sell stocks, it is not practical to diversify your cash too much.
  4. travis


    This is really bad news. But wait, I thought this would matter only if you had a negative balance in dollars. But what if you have 10k dollars, and yet need 30k dollars of margin for your CME futures, and you have part of that margin in other currencies?
  5. Well, you do not have the USD margin required then, do you? You are going to have to borrow it as far as I can see.

    Now, the CME itself allows margin to be posted in multiple currencies, but I do not think that IB is going to do so. I could be wrong.
  6. travis


    Great, thanks for the detailed information and the further details. Now the next question in my mind is how heavy is that interest charged. But, in case no one knows, I'll find out soon enough on my IB statements.
  7. travis


    Thank you again.

    Great link and great news, too. Given that I will need precisely that 10k of extra margin only two or three times per week, and only on an intraday basis, all I have to fear is getting charged about 50 euros per year (52 weeks in a year, and getting charged fifty cents twice a week).

    I consider it worth it to diversify, because I am at once protecting myself against the fall of any one currency and also at the same time I am investing in these currencies, which I am buying now while they're undervalued (CHF, GBP, JPY), so that I'll make a profit at least as large as the fees I will incur.