Hello everyone,

I am new to this, I searched a lot but couldn't find the answer to my question, so I decided to ask here.

My account is in EUR but I want to buy several stocks in USD. So I converted let's say EUR to 500 USD and bought stocks for 450 USD. However, the system says I still have an FX position for buying 500 USD which keeps gaining losses due to the constantly changing exchange rate and it doesn't let me close that position due to insufficient cash. Basically, it is like I have an FX position for buying 500 USD which stays there and collects losses but I cannot close it because I have used 450 USD from it for buying US stocks. And just to mention that I am planning to keep the US stocks long-term for several years.

My questions are:
1. Can I somehow close the FX position but keep the US stocks?
2. If this FX position has to stay there for years, will I have to pay any interest for it? My account is Cash and I am not using margin (at least I hope that I am not).
3. If there is no other option, do you recommend me to keep the FX position and the US stocks for years and risk a significant change in the exchange rates, or it is better to buy stocks only in EUR which is my base currency?

Any other recommendations and advice are highly appreciated. Apologies if my questions sound stupid, I am just unfamiliar with some of the things and couldn't find answers.

stoyan97 

Hello everyone, I am new to this, I searched a lot but couldn't find the answer to my question, so I decided to ask here. My account is in EUR but I want to buy several stocks in USD. So I converted let's say EUR to 500 USD and bought stocks for 450 USD. However, the system says I still have an FX position for buying 500 USD which keeps gaining losses due to the constantly changing exchange rate and it doesn't let me close that position due to insufficient cash. Basically, it is like I have an FX position for buying 500 USD which stays there and collects losses but I cannot close it because I have used 450 USD from it for buying US stocks. And just to mention that I am planning to keep the US stocks long-term for several years. My questions are: 1. Can I somehow close the FX position but keep the US stocks? 2. If this FX position has to stay there for years, will I have to pay any interest for it? My account is Cash and I am not using margin (at least I hope that I am not). 3. If there is no other option, do you recommend me to keep the FX position and the US stocks for years and risk a significant change in the exchange rates, or it is better to buy stocks only in EUR which is my base currency? Any other recommendations and advice are highly appreciated. Apologies if my questions sound stupid, I am just unfamiliar with some of the things and couldn't find answers.

See: https://www.reinisfischer.com/converting-currency-balances-eurusd-interactive-brokers-lynx-trader

You do not have to convert EUR to USD before buying a stock (just buy the stock). If that is what you did.

Just keep your stock. After you sold your stock you will have a position in USD which you can convert as stated above via the link. You can decide when to convert to EUR when the rate is favorable (low EUR rate).

If you are holding a position in USD you should be able to close it.

Good luck.

Thank you for the information and advises!

However, with my account the things don't work as described in the link. When I try to buy a US stock with EUR, it says "insufficient settled cash". The same happens when I try to close the FX position that I used for converting EUR to USD for buying US stocks, only the remaining USD (after deducting the amount equal to the price of the shares I bought) is available now, let's say it is 50 USD. But the whole FX position for 500 USD stays and cannot be closed.

My concerns here are first, are there some fees that will accumulate for holding this position long-term for years? I couldn't understand from the information that IB provides; and second, what will happen when it comes time to take profits and convert from USD to EUR - I will have to open an FX position to convert USD to my base currency EUR in order to withdraw, but I guess then that FX position will still stay open - will I be able to withdraw in that case?

stoyan97 

Hello everyone, I am new to this, I searched a lot but couldn't find the answer to my question, so I decided to ask here. My account is in EUR but I want to buy several stocks in USD. So I converted let's say EUR to 500 USD and bought stocks for 450 USD. However, the system says I still have an FX position for buying 500 USD which keeps gaining losses due to the constantly changing exchange rate and it doesn't let me close that position due to insufficient cash. Basically, it is like I have an FX position for buying 500 USD which stays there and collects losses but I cannot close it because I have used 450 USD from it for buying US stocks. And just to mention that I am planning to keep the US stocks long-term for several years. My questions are: 1. Can I somehow close the FX position but keep the US stocks? 2. If this FX position has to stay there for years, will I have to pay any interest for it? My account is Cash and I am not using margin (at least I hope that I am not). 3. If there is no other option, do you recommend me to keep the FX position and the US stocks for years and risk a significant change in the exchange rates, or it is better to buy stocks only in EUR which is my base currency? Any other recommendations and advice are highly appreciated. Apologies if my questions sound stupid, I am just unfamiliar with some of the things and couldn't find answers.

Hi,
This is virtual position which shows P&L, because of currency rate change. You choose "CASH" account so you need to have specific currency to buy stocks.

It's easier to use margin account, even if you are not using margin you can buy stocks in for example Japanese YEN and then cover the debit buying YEN after it.
Or you can buy YEN and then buy stocks.

1. You should, but there is no reason to do it. (and you will pay comm.)
2. If you don't have negative balance of any currency, you won't pay any interest.
3. You are risking a significant change in the exchange rate in long term, no matter if you will close your FX position or not.

I have on my IB account, CHF, EUR, USD and some emergin markets currency and I don't care what is happening with exchange rate, till i want to withdraw it (which never happen).

I hope it's more clear.

Quoting 

"The same happens when I try to close the FX position that I used for converting EUR to USD for buying US stocks, only the remaining USD (after deducting the amount equal to the price of the shares I bought) is available now, let's say it is 50 USD."

You can't close entire 500USD position because you don't have 500$

I'm not sure, but I think your gonna have to pay for the data monthly. That can really add up if your just gonna sit on it longterm.

I say not sure because I cant remember if there is some sort of value bundle

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