yes there are 'auctions' this is sth about the volatilitybreak: the deutsche boerse AG determines two different price channels for each stock that is traded on xetra (static and dynamic). they re aprox 5-10% below/above the last traded price. noone except the deutsche boerse knows where they exactly are. the static channel is set only once a day the dynamic one is updated realtime. if a stock hurts one of those channels the first trade that lays outside triggers the volatilitybreak. http://www.xetra.de/INTERNET/XETRA/x4_public.nsf/Web+PDF/Aktienmarktmodell/$FILE/mmaktienr6.pdf if anyones interested in the excat regulations, take a look at the pdf.file above. thats the german xetra-model in english. kev//
You are right, it is easy to upgrade to a multicurrency account, but you can't change the base currency of that account. So if you want to protect yourselfe from exchange rate risks you have to open a new EUR based account. The problem is that you can not transfer funds between accounts that have a different base currency. If you are from Europe this means you have to transfer your $ funds back converting them to EUR and send those to IB again to fund your EUR based account. This is something IB could make a little bit easier.
speeddragon, something like this may be in the works. i don't want to elaborate on it at this point as I don't have all the facts but expect that the ease of trading in one currency vs another and possibly moving cash from one currency to another becomes a standard feature for most accounts.
@def That would be very important - I just tranferred back to my home account and will transfer then back to IB - the SIPC-thing is really annoying ! Harry
sipc is from the US gov't. you can't expect it to cover foreign stocks. IB does have additional insurance but i believe it is just for US stocks. When overseas assets become significant, the firm will probably consider obtaining additional insurance. Until then, hopefully the comfort of the conservative margining system, the firms reputation, the posted balance sheets and the solild capital structure of the parent company should give you some comfort. if insurance really is a concern and you plan on depositing significant assets with IB, the firm is willing to offer additional insurance at cost on a case by case basis.
Now that I have a multicurrency account (can scatter my money internationally now ), how exactly do you use it? For instance , how would I buy MSFT on the Xetra? Is this documented anywhere?
just load up the symbol and trade. you'll end up with a debit balance in euro's against a credit in US$. alternatively you can convert US$ to Eur internally via IB. read the following from the manual which contains an example: http://www.interactivebrokers.com/html/webhelp/Making_Trades/Multi_Currency_Trades.htm Also note you can trade foreign currencies as well via IB's internal network. Only CHF, EUR, GBP, HKD, and USD are available at this time. The above link describes that as well.
For some reason , when I entered the symbols yesterday, I didn't see the foreign markets in the selection popup, but they are there now. Would appreciate any comments on how to use this feature, ie, possibly arbitrage of some kind, and is that feasable using this platform?
this is going to sound silly but ...... if you can sell MSFT higher in Europe and buy it cheaper in the US then you have an arbitrage. You will have two open positions though and will need to close it. That is the risk. The products are not fungible (i.e. you can not offset them for margin or clearing purposes). However, as they should trade in line at some point you should be able to close out. I haven't followed the European US markets other than I know they do trade. I'm not sure if you'll be able to do the above or if the spreads and costs would even make it worth while. The real benefit is that you can take a position on currency, asset allocation etc.