K200 Kospi positions overnight on IB

Discussion in 'Index Futures' started by NasiWarrior, May 14, 2010.

  1. Is this how trading the Kospi works?...
    And is the danger highlighted at the end of the post a reality?

    1. Buy to Open K200 using Interactive Brokers,

    2. IB will lend you the KRW, which is on based the accounts ability to margin KRW. (note: maximum leverage on KRW/USD is 10%)

    The account will now have:

    (a) short KRW/USD FX position.
    (b) Long K200@KSE SPAN margined position.

    3. Interest will be charged on the FX as followed:

    4.04% on 1 - 120,000,000
    3.54% on 120,000,001 - 1,200,000,000
    3.04% on the amount above 1,200,000,001

    4. Sell to Close K200. If trade returned profit then now have long KRW/USD FX postion. FX postion earns interest as follows:

    1% on 1 - 120,000,000
    1.25% on 120,000,001 +

    Is this all correct?

    I'm concerned that IB's market close price of KRW/USD is c-1.00000000.

    I don't have millions of Dollars in my account to margin millions of Won at a 1:1 ration!

    ...For me it would mean facing a margin call on any possible overnight FX position.

    How is it possible to carry KSE trades like this overnight ?