I am located in HK. Want to invest in USD. Preferably through low trading cost brokers such as IBKR etc.,. Opened an account at IBKR. For USD, IBKR wants me to fund their US located Citi account through Wire transfer. There is sizeable transaction cost to wire transfer from HK to USA. Looking for suggestions on either 1) Platform that can help invest in USD from Hong Kong.. (incase IBKR isn't a good choice) 2) Low cost method to wire transfer USD from HK to USA
Unfortunately, I don't think there is such thing as low cost wire transfer. I think your best choice would be to actually open the IBKR account in HKD. Within IB you will get access to great exchange rates, far better than you can get through any public bank. If you are trading US markets it will gain profits in USD. Then you would exchange USD -> HKD within the TWS and wire out in HKD of which I believe you get one free wire per month and you will save immensley on the FX rates from IB.
There are two interpretations to your posting. 1. Invest in the US dollar. But you have to divest in other currencies (eg CNY, HKD, GBP). A few days/weeks/months later, then you close your position. 2. Open a trading account in USD.
Was going to suggest the same. You avoid any correspondent bank fees and better yet, avoid doing any FX at a bank whose spreads will cost your more than any wire fees.
A couple of the comments above are accurate and very helpful but in the hope of not beating a dead horse with a real example and add a few points. You need to really understand all costs/hidden fees to avoid being penny wise, pound foolish: - you will almost certainly be better off depositing HKD in your IBKR account and doing a conversation to another currency. In this case, USD. IBKRs current USD.HKD conversion rate / spread at 11:25 AM Wed is 7.84541 at 7.84549 with a last of 7.84546 that is less than a 1 pip spread, and you can work the order. In contrast, this is a cut/paste from one of the major banks 7.82559 at 7.86551 - wonderful quote down to the 1/10 of a pip BUT look how wide that spread is. - in real dollars. Take 100,000 HKD (only ~13K USD) Bank X = 100,000/7.86551 (can't work the spread so need to buy on offer) = 12,713.73 USD IBKR = 100,000/7.84549 (and you can do better by working offer) = 12,746.176 - $2 (commish) = a NET GAIN of 12,744.176 - 12,713.73 = $30.446 That's $30 on a relatively small conversion. Massive hidden cost - especially when talking larger size. Now if you have USD and need to xfer. we (IBKR) do deposit them outside of HK and thus you may have to pay perhaps a $10 correspondence bank fee. BUT, you get a few benefits on segregation but more importantly we are able to provide higher interest rates (currently up to 4. 83%) and of course you can convert back to HKD and save when repatriating back to HK. Hope the above makes some sense to you.