My account shows a positive balance of CHF. When I try to do this on trader workstation nothing seems to happen. When I try on the iphone app, I get the message: "Trading CHF.USD Forex for a Model is not supported." I am not sure what this means or what I need to do to close the balance. Should I be using the "covert currency" option instead?
currency question
- Thread starter fusiforme
- Start date
Yes, you need to convert currency in case you actually want to sell USD to get cash CHF (or vice versa).
Thanks for your reply. When I try the conversion option , asking it to convert the entire amount of CHF to USD I get the message "There is insufficient CHF funds which may result in a negative cash balance." What does this mean?
When you convert currency you have to pay a transaction fee. This fee is often in the currency you are starting from, in your case CHF. So if you want to sell 1000 CHF it will cost you about CHF 1002, resulting in a negative CHF cash balance of -2 CHF. I think this is what the warning is about. If you want to check this in advance you can select the "what if" button before placing a trade. This is also indicated by the text "see margin impact" or something like that. Here you can see what the actual transaction fee would be.
That makes sense - that might also explain why I have small negative currency balances in other currencies that I can't figure out how to make go away. For example I closed out an SGD position and have a -6 SGD balance and I'm not sure how to deal with that.
Is there some way to avoid the negative balance? Or correct it back to zero after making the conversion? What do I need to do if I just want totally zero out a foreign currency in my account?
Is there some way to avoid the negative balance? Or correct it back to zero after making the conversion? What do I need to do if I just want totally zero out a foreign currency in my account?
This would make you do another currency transaction, resulting in yet again a transaction fee. For such a small amount the transaction fee would be relatively large. Usually I can't be bothered by these small cash positions, but do try to keep them positive as IB charges debit interest on even the smallest negative cash position.
I recall (but haven't used) that TWS has a button in a menu called "close all foreign currency positions". I don't know whether it would indeed bring it back to exactly zero, nor how much they would charge in transaction fees.
