My base currency is USD. The unrealized pnl is shown in terms of USD. The unrealized pnl is showing on the top of my TWS in this row: TOTAL USD [unrealized pnl] It keeps fluctuating as the EUR.USD changes just like if you had a position on. If I go to my account window, there is also an unrealized pnl next to the USD row in the "Market Value" box. BTW, I don't have any open position in any securities.
Start a chat with the help desk. I'm no expert on this and others could chime in but in that case, I'd guess if you're flat other currencies, it will go way after the trade trade and might just be a feature for currency traders.
Thanks for stepping in....I apologize for the incorrect info ! On the page I quoted it said IDEAL should be used for conversions NOT trading. I understood that to mean it was the one to use for conversions. Perhaps better wording by IB would have been IDEAL should only be used for conversion and IDEAL PRO should be used for Conversion AND trading? So def, is that the case that I can use IDEAL PRO for conversion and not have to worry about margin loan and paying interest (as long as I have the money in the account) ?
Try This: In your account window, expand your FX portfolio, right click the position and adjust position size to zero. That should get rid of any PNL. Obviously your net liquidation value in your base currency will still fluctuate with movements in the Euro.
It's not necessarily that simple nor is this outlined clearly by IB. With most fx brokers you still need a margin loan (i.e. pay interest differentials) even if your order size is less than or equal to your account balance. This is very different than simply converting one currency to another (full cash) as one would at an excahnge booth (with better spreads on the case of IB ). Like the OP, I am still unclear as to how IB differentiates between these two types of currency conversions.
no, it's not very different from exchange at a cash boot. If you got the currencies in your account you are just converting them, if you convert more than you got you are taking a loan. It's that simple.
False. IB states that one can create a margin loan when converting currencies to buy equitites OR one can convert them direction (full cash). This choise has nothing to do with order size (ie. larger or smaller than balance.)
it's obvious you don't understand what they are saying and you are making this way too complicated. If you buy stocks in a foreign currnecy and you have no foreign currency you go debit in that currency they provide you with a loan. It is that simple, don't try to make this complicated.
Yes and there are several ways of during this: 1. Margin Loan colladeralized by the base currency (to purchase a security in a foreign currency) 2. Foregoing the Margin Loan and converting funds directly into the needed currency. 3. Trading Fx on margin for the sake of trading fx (without purchasing securities). There is a difference and it isn't that simple. Period. Take out a day or two and read IB's manuals.
I still claim it is quite simple but you are mixing up several things here with the equities transaction and making things difficult. If you buy securities and you convert currencies there is no need of any loan at all so case closed there. If you take out a margin loan for your securities you are basically just doing fx loan because in the you are debit in one currency and you get payed in the other currency, there is no difference here with a straight fx speculation. It's not because you give it a different name that it makes any difference. It's simple: you can get leveraged in fx 50 to 1, the currency you are debit in you pay the intrest rate for that, the currency you have a credit in you get payed money for that. You can try all kind of combinations with additional transactions in all kinds of securities which might result in additional margin or not, but this principle stays the same. It's not because you start it to give it a different name that this principle alters.