Switching from CT to IB

Investing / Brokers
21

Hmm ok. Then what does this message mean when I do my trade preview:

close
Warning
CASH AVAILABLE (SETTLED CASH): 0.00; CASH NEEDED FOR THIS ORDER AND OTHER PENDING ORDERS: XX’000.00

Can I just ignore it and be safe in the knowledge that I have the cash to trade?

Also on the next stage I get:

Preview Order
close
Order: BUY XX Stock @ 200.00 LMT DAY SMART USD Fill Outside Regular Trading Hour: No

Amount	Commission	Total	Initial Margin	Maintenance Margin	Equity With Loan
XX,XXX USD	NA	NA	0	0	                                                126

Why would it be mentioning an equity with loan?

22

Maybe you have a cash account with wrong currency, i.e. you forgot to convert currency

Upgrade to a margin account and you shouldn’t see such silly messages ever again (as long as you do have the funds of course)

1 Like
23

Ahhh crap that must be it, makes sense, my account is in chf. Thanks for pointing out the obvious, hedgehog.

Question: does it make any tangible difference trading on NASDAQ in USD to trading on SIX in CHF? I was trading on SIX in CHF before but IB doesn’t have many of the stocks I want to trade on SIX.

Shall I just stop worrying and go full NASDAQ? :slight_smile:

24

US exchanges are orders of magnitude cheaper than European, so yes I would advise to do all your shopping there if possible

2 Likes
25

This only applies if you keep more than 100k CHF, which you shouldn’t anyway because it’s not covered by deposit protections.

2 Likes
26

Ahh interesting, thanks. I exchanged my first 15k CHF to USD on IB the other day which seems to have cost me around 15chf but at least now I know how to do it! I think one of the things with IB is that everything you do just seems an unintuitive chore, but once you get over the initial bewilderment I am sure it’s more or less smooth running. I will now start to trade in USD on NASDAQ going forward. :slight_smile:

@Alex ok thanks for confirming that. :slight_smile:

27

That does not seem credible. I exchanged 50’000 and the cost was much smaller.

2 Likes
28

check out

it should cost you much less if you do it the right way, just as bojack indicated

1 Like
29

My mistake Bojack, it cost me 10chf (I was going from memory but just now checked the exact figure), but it’s very possible I did it in a less than optimal way.

@nugget I will check that out as I am about to do buy some VT stocks and will aim put into it every month. Thanks. :slight_smile:

1 Like
30

10 is still waaay too much, it is usually 2.

How did you do it if I may ask?

31

I went to the Forex section of Webtrader and used the Forex tab, entered “USD” as a symbol, then selected “USD, Cash, IDEALPRO, CHF”. I then bought as much as I could.

It’s my first time so there’s a good chance I did it wrong. :slight_smile:

32

That still can’t be true. IB charges 2 USD per every FX trade. Then comes the spread. Current spread for USD.CHF pair says:

  • BID 0.99990 (IB will buy 100’000 USD from you for 99’990 CHF)
  • ASK 0.99995 (IB will sell 100’000 USD to you for 99’995 CHF)
  • SPREAD: 0.5p

So a round trip (buy and sell) of 100’000 USD should cost around 2 (buy commission) + 2 (sell commission) + 5 (spread) = 9 CHF

And you say you you paid 10 CHF for a single trade of 15’000.

1 Like
33

I just got off the phone to IB and apparently I did it the wrong way in the respect that I did not do the “asset transfer” option. Instead, I did it via Forex which means that even though I bought almost 15000 USD it reports me having losses on my CHF account due to the currency conversion rate fluctuations.

It’s going to take me a little while to get used to this…

34

So you basically read the wrong number as the transactioncost?

35

I don’t think you did the wrong thing. I also exchanged using IDEALPRO in WebTrader. IT creates a virtual position and shows you the current unrealized profit/loss on this trade. Let’s say you exchanged 9’900 CHF into 10’000 USD (rate 1 USD = 0.99 CHF), but now the rate is 1 USD = 0.98 CHF, so your 10’000 USD is worth 9’800 CHF, so you implicitly lost 100 CHF. But that’s not the conversion cost. That’s just the exchange rate fluctuation.

3 Likes
36

It is of course possible I looked at the CHF figure after the FX fluctuation reductionrather than the actual transaction cost… it has further fluctuated negatively so that makes sense.

In which part of the interface/report would I see how much that specific transaction cost me? Would it be the transaction analysis report as below?

FX_cost
e0cc4a6313b553470d6a1d07daf1bb019e159c08.PNG2115×309 26 KB

37

Ok, just saw this as I was writing my previous post, makes sense. He said there is also a way to do it as an “asset transfer” without it showing these fluctuations, so I will investigate how to do that to make things a bit simpler. I’ll share it when I find it out. :slight_smile:

38

But it does not make it any simpler. The virtual position shows you some additional information. The trade is, as far as I know, all the same.

You can make this trade without the virtual position if you use the full Java app (TWS) and use FXCONV instead of IDEALPRO. Also in there you can hide the virtual position that you created.

I would interpret this virtual FX position like this:

  1. You transfer CHF to IB
  2. You exchange them to USD
  3. You buy some stock
  4. You wait
  5. Then you see that this stock has generated 15’000 CHF profit
  6. But on the FX position you see that it “generated” 5’000 CHF profit due to change in exchange rate.
  7. So the 15’000 CHF return consists of 5’000 xrate and 10’000 actual growth
2 Likes
39

I see what you mean, but from my perspective if I am just changing CHF for USD then I am not interested in how the fluctuations visibly affect the overall total in CHF on an ongoing basis. I just want the money converted without any virtual position, so I shall see how I can hide it in future. :slight_smile:

1 Like
40

You can hide it now. Search the forum for one of the other threads about IB to find out how, it’s been covered before.

1 Like