I do the same as steeldust. I never convert to CAD unless I have to. Until then, it stays in US dollars.
Well I checked with IB and if you open an account in $CAD and buy US stocks, they will convert the money to $USD to buy the stocks and then you can reconvert it back to $CAD once you get out of the position where you will lose the spread on the FX each time. So basically I am back where I started.
A universal account does not convert the currency for a non base transaction. There is no exchange...if IB told you that then get it in writing and match it up against there own literature. You must have called Interactive Jokers
I second what cashola said again. If you buy XYZ on the TSX, you are basically getting a margin loan for the debit, when you close out that transaction the margin loan gets covered, if you make profit on the trade you have a credit balance in CDN dollars, if you lose money on the trade you have a debit balance in CDN dollars. Or vice versa for CDN $ accounts trading US securities.
personally I just leave all of my cash in american dollars, if your mainly a us trader. It became too much of hassle. Focus on the trading, and the research.
if you ahve an account with waterhouse how are you taxed on it? do you get a 1099 like in the states? does the canadian gov't get a report of your trades for tax purposes?
Im mainly a US trader but live in Canada. I live on CAD$. I've been partly hedged the past few years the USD has dropped and it has saved me in the 6 digits. I don't consider it to be a hassle. What's the point of focusing on your trading when the value of the money you are making is going in the toilet in $CAD terms?