Forex vs ETF

Discussion in 'ETFs' started by nravo, Oct 23, 2007.

  1. nravo

    nravo

    Do I have this right? Let's say 300 shares of FXE costs about $42,000 and costs me roughly $21K in margin. The $42,000 EUR via Forex, however, say at IB, costs me about $2K in margin?
     
  2. Surdo

    Surdo

    Spot Fx is generally 100:1 leverage as are Fx futures in ECZ07, $2,025 will buy you 1 contract worth $142,760.
     
  3. nravo

    nravo

    Is that how it works on Forex Pro at IB? Contracts? Not cash amounts? So if I place an order to buy $30,000 AUD, the minimum, I have bought a boatload of contracts on margin? Or have I bought $30K AUD/USD and only used about $300 in margin?
     
  4. sim03

    sim03

    I assume you meant $178,450.
     
  5. sim03

    sim03

    No, it is cash, not contracts. 2% margin, not 1%, for the majors at IB.

    http://www.interactivebrokers.com/en/trading/marginRequirements/margin.php?p=fx&ib_entity=llc

    The margin in both of your examples (EUR and AUD) is incorrect... see if you can post the correct figures.
     
  6. Surdo

    Surdo

    EURUSD is 1.4261, am I missing something?
    One Euro will cost you 1.4261 USD.
     
  7. sim03

    sim03

    1 EC contract = EUR 125,000 (not EUR 100,000) &asymp $178,450.
     
  8. Surdo

    Surdo

  9. nravo

    nravo

    So I can take, say a $50,000 position in the Euro for $1,000? Why on earth would I do an ETF and eat up all that capital?