I don’t quite understand. What does it mean „options route“?
Don’t you transfer Euros to IB and then buy VT straightaway?
Is it because VT is not offered to you directly ?
In the EU, we can not buy US structured products, like ETFs and mutual funds. The EU requires some information in key investor documents that US companies are forbidden to provide, like scenarios for expected return. I can not buy VT on IBKR.
But I can trade derivatives (options). And liquid US ETFs have option trade. By selling a deep in the money put option, I am guaranteed that the counterparty excersizes it, and I get 100 stocks of VT.
I just sercumvent the EU PRIIPS prohibition.
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Wow
That’s something 
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Nothing special, TBH. It is a standard way for the Dutch to invest in US ETFs. I do it in a simple way, some people do it more asvanced (and save ± 3 euro on a trade).
I am just a bit uncomfortable with the strange currency conversion things on IBKR…
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Here’s another bit of info, as I just observed how 9000 euro get exchanged to CHF. Any amount less than 20k is treated as an “odd lot”, which means a spread does apply on the manual currency conversion. I have set a sell limit of 0.94 for my 9000 euro, and the sale occurred when the rate was 0.94007, which means the currency conversion cost was 2.63.
Now I wonder if there is anything to add to the 0.03% of the automatic currency conversion…
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Can somebody explain why we have to wait 2 days (and not only 1) after manual currency conversion?
Before change
- Currency conversion: T+2
- US stock market: T+2
→ Settlement on the same day if the orders were placed on the same day.
After change
- Currency conversion: T+2
- US stock market: T+1
→ Settlement shifted by one day, if the stock order was placed two days after the currency conversion.
Why isn’t it sufficient to wait one day after currency conversion? Then, the settlement would be on the same day as before.
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Because banks and financial institutions benefit from the short-term float by investing the cash before settlement …?
There’s also some risk management aspects, but they’re probably mostly historical and T+1 is probably technically feasable (pure guessing on my behalf here, I don’t understand the FX exchange mechanisms under the hood as well as for equity or bond trading).
Not sure what you mean here. Settlement is x business days (T+x) after the order has been placed. Your broker UI might say that equity has been bought or that cash has arrived, but it has not and the security or cash won’t be on “your” book until the settlement date.
See this post for a short summary of the mechanics of equity or bonds being traded.