suggestion on how to keep Euros with IB ?

[luisHK]

IB is charging its customers for positive EUR cash balances over 100k, any idea how better ways to keep euro in liquid positions with little risks ?
Never bought european treasuries, no idea about commissions and spreads, but those added to the fact rates are slightly negative doesn't make them look like an obvious choice.
I hold a few liquid EUR stocks, but that's risky. Plus stock commish is higher than treasuries', at least in the US.
Changing eur to USD, buy US treasuries, buy eurusd futures ? It should cost a tad less than keeping eur cash at IB but sounds like a headache.
Am i missing something ?
FWIW i will probably keep on holding mostly USD until i can wire and keep some euro for free in a EUR bank in a ew months, but wondering if i'm missing something, and around 1.11 I'm keen on buying some euro without adding to euro stocks positions.

 

[GRULSTMRNN]

Converting to EUR base ccy came to mind first, but may not make much sense if most cash you have sitting around is USD. To make more informed recommendations, total account size and relative share of that in EUR would be needed, but I doubt you wanna share that info.

IB is charging its customers for positive EUR cash balances over 100k, any idea how better ways to keep euro in liquid positions with little risks ?
Never bought european treasuries, no idea about commissions and spreads, but those added to the fact rates are slightly negative doesn't make them look like an obvious choice.
I hold a few liquid EUR stocks, but that's risky. Plus stock commish is higher than treasuries', at least in the US.
Changing eur to USD, buy US treasuries, buy eurusd futures ? It should cost a tad less than keeping eur cash at IB but sounds like a headache.
Am i missing something ?
FWIW i will probably keep on holding mostly USD until i can wire and keep some euro for free in a EUR bank in a ew months, but wondering if i'm missing something, and around 1.11 I'm keen on buying some euro without adding to euro stocks positions.

 

[HobbyTrading]

How about buying some German bond futures? In TWS are they called GBM, GBL, GBX (GBS is the 2-year short term future).
Converting Euro to USD and then keeping cash gives you some credit interest, but exposes you to the exchange rate.

 

[entropytrading]

How about buying some German bond futures? In TWS are they called GBM, GBL, GBX (GBS is the 2-year short term future).
Converting Euro to USD and then keeping cash gives you some credit interest, but exposes you to the exchange rate.

Thanks very much for telling us "mothers are (mostly) women".

LuisHK, I can't think of anything that you dont already know. Maybe some liquid sovereign bonds like those of italy spain netherlands?

 

[silveredge]

how about ETFs like IEGA, or US treasury ucits quanto into eur

 

[elt894]

If it's only a few 100k, you could spread it out between other negative yielding currencies like CHF, JPY, and DKK, keeping each within the 0% tier and hedging with futures. You could scale it a bit more with multiple accounts.

 

[luisHK]

how about ETFs like IEGA, or US treasury ucits quanto into eur

Starting to look into EUR etfs, never bought one before. IEGA expense ratio is 0.2%, which sounds high for a government bond ETFs, but mostly isn't oen going short EURUSD when buying this ETF, while losing the interest differential ? Isn't that inferior to :

Changing eur to USD, buy US treasuries, than buy eurusd futures ?

Not familiar at all with the structure you mentioned, i might be totally wrong, thanks for the suggestion.

If it's only a few 100k, you could spread it out between other negative yielding currencies like CHF, JPY, and DKK, keeping each within the 0% tier and hedging with futures. You could scale it a bit more with multiple accounts.

That's not really going long EUR anymore, but still an interesting option. Would need to check the correlation between those currencies and euros.
Most likely I will move to Europe within a couple of months and will get better options to keep euros cash there, as well as might use all the EUR cash to buy property, not sure, so i doubt I will change my forex balances until than except if euro takes a dive, but thanks all posters for your replies, including future ones.

How about buying some German bond futures? In TWS are they called GBM, GBL, GBX (GBS is the 2-year short term future).
.

Thanks very much for telling us "mothers are (mostly) women".

LuisHK, I can't think of anything that you dont already know. Maybe some liquid sovereign bonds like those of italy spain netherlands?

Didn't look into them on IB but that should be sligthly better than keeping cash there, if the holding time is not too short

Converting to EUR base ccy came to mind first, but may not make much sense if most cash you have sitting around is USD. To make more informed recommendations, total account size and relative share of that in EUR would be needed, but I doubt you wanna share that info.

I don't think converting base currency would change anything regarding the cost of carry of eur cash on an IB account. I might still be doing just that when moving to the EURO zone, if that helps tax filings there.

 

[elt894]

That's not really going long EUR anymore, but still an interesting option. Would need to check the correlation between those currencies and euros.

What I meant is that you would buy CHF and then go long EUR/short CHF futures to be net flat CHF.

If you do it with USD like you mentioned, you're only saving the 25bps that IB charges above the benchmark rate, but would still be paying ~70bps due to the spread between treasuries and EUR/USD futures. You come out ahead by going to CHF because IB is paying an above market rate (0%) on small balances.