i keep 30k in my IB account to trade futures and sweep profits every 2 weeks......now if i want to short 100k EUR/USD fx.....then how would this affect my cash balance and the margin left for futures? Also fx is treated like futures when it comes to taxes, right? 60/40 and one line accounting? or am i better off trading the FX futures? I prefer fx because i can trade 25k lots and scale in/out where as the fx contract is a 125k contract....which is pretty massive.......even the mini contract is about 75k (not sure on this one).
I'm not sure about IDEAL which is for lots less than 25K but someone on here mentioned before that IDEALPRO, which is much more liquid than IDEAL, is something like 2000 margin on a 100,000 lot. I haven't traded forex in awhile but I believe you are correct in the accounting. I believe it is treated like futures for tax reasons as you say. My preference/recommendation is FX futures on CME if you are looking at getting into currency trading.
i think fx futures maybe be a better deal than idealpro.... commissions on fx futures is only around 2.5 per side (on a 125k contract)..........whereas idealpro charges 2.5 per trade regardless of size and .2 basis points*trade value 1 basis point = 0.0001......so what would my commission be if i shorted 20k EUR aside from the 2.5 minimum? .2*(0.0001)*20000 ??
No. IB charges .2 basis points (0.00002) commission for each trade. The 2.5 is a minimum and not a plus. Thus, if you trade above 125k lots than you can just add 0.4 pip to the spread.
Tax treatment of Forex is tricky. Read the following: http://www.greencompany.com/EducationCenter/GTTRecCurrency.shtml I don't trade Forex but perhaps someone that uses IB could tell you where IB reports Forex trades (1099-B, block ?) As to margin - I'd setup an IB paper trading account and fund it with $100K. Then do your futures and Forex trades and see how the account handles the margin. Jack
agreed with the other posters that suggested trading the futures, if for no other reason then they are regulated. The spot FX market is brutal, and I mean "rip off your head and ***t down your neck for laughs" brutal. Regards,
I think i will stick to futures.......but why does everyone say fx market is very shady......yeah its unregulated.....but what kind of games are being played there? also isn't idealpro the best way to trade fx considering it is an ecn model?
a lot of spot brokers front-run your trades and play with the spreads. It's just part of the market. Regards,
Strong stomachs and large accounts. They also have a longer time frame than just a day trade and can handle temporary conditions. Usually, the longer your time frame the less these types of bucket shop games will affect you. Eventually, the market will go where it will go.