IB: Small balances in various currencies

[pescador]

Quote from OTCkrak:

because of this i switched to fx futures.. lol

While fx futures are a possible workaround (at least for the most common pairs),
trading fx in an intelligent way one never will have to use IDEAL for conversions, and one does not need to live with negative residuals at all.

 

[ZRA]

Quote from Hurricane:

IB will periodically convert small balances back into your base currency at day end rates without charging a commission. You don't need to do anything for this to happen. But I'm not sure what the upper limit is for this. Probably just a few $ worth of each foreign currency.

Does it really happen? When did this happen to you last time? How much was converted back?

The small balances have been there for quite some time. IB doesn't seem to do anything about it.

 

[pescador]

Quote from ZRA:

Does it really happen? When did this happen to you last time? How much was converted back?

The small balances have been there for quite some time. IB doesn't seem to do anything about it.

This happened to me exactly one month ago.
But before, it had not happened for a year....
So I don't really think they do it regularly ... just sporadically.

 

[ZRA]

Quote from OTCkrak:

because of this i switched to fx futures.. lol

Not if you trade futures whose currency is not your base currency. lol

 

[ZRA]

Quote from pescador:

This happened to me exactly one month ago.
But before, it had not happened for a year....
So I don't really think they do it regularly ... just sporadically.

Do you remember how much was converted?
Did IB charge you any fee or commission?

 

[pescador]

Quote from ZRA:

Do you remember how much was converted?
Did IB charge you any fee or commission?

All residuals (all amounts below 10 USD) were converted, without any charge.

But read my posts above, the solution I write does work without any problems.

 

[ZRA]

Quote from brocklanders:

You just live with them I guess until IB provides a way to get rid of them. They are a nuisance to say the least just trying to keep your account balance reconciled but they are so small it is not worth worrying about. I've got a debit Yen balance that costs me 25 cents a month in interest! Why doesn't IB just let us get rid of these things. I've had some for over a year.

We are all in the same boat.

Little interest per customer accumulates and turns into noticeable amount. I think this is how a big company earns some easy cash.

The implications are more than that. IB is charging you interest too on positive balances of each currency so to speak. IB doesn't pay you any interest for the first sum of money per currency (USD = 10k, AUD = 12k, CAD = 12k and so on). You lose more interest if you spread your balances into different currencies. You lose credit interest on max 34k if you hold USD, AUD and CAD. IB keeps those interest that each customer should be entitled. They are some risk-free easy cash for IB.

To be fair perhaps IB may waive interest on really small balances. Let's say USD 200 or its equivalent.

 

[ZRA]

Quote from total_keops:

You can leave them there nobody cares, not even you.
If you close the account IB will convert them all back to your account currency (I dont think they charge the comish).

That sounds fine. I wish IB could provide this service which let me close out small residuals without commish perhaps via account management. The rates would be day-end. This increases the flexibility of currency management.

 

[ZRA]

Quote from independenceair:

they're bogus..called residuals..won't affect anything ..you can reset them to "0"

Er! You don't want your money?

I hate seeing residuals sitting there accumulating debit interest (or forgoing credit interest) but not so much to discard them.

 

[ZRA]

Quote from pescador:

All residuals (all amounts below 10 USD) were converted, without any charge.

But read my posts above, the solution I write does work without any problems.

Yes your solution works but with some drawbacks. You pay double commission if you do it in "buy 100k sell 101k". It may still not worth it if your balance is quite small.

I think we just have to bite the bullet until IB offers us a function to manually close out residuals.

I don't think IB wants to implement though due to the conflict of interest.