Trading US instruments from Canada

T

the bouch

Say you want to trade US stocks and live in Canada, do most of you just leave the money in $USD and stay exposed to movements in the $US/CDN? Personally I hedge my money with the futures but it's not really a perfect hedge since I have to pay taxes on my gains, or get to save taxes on my losses.
Any ideas on other ways to do it?

B
 
It's a great question, I believe with IB, you can open an account with CDN currency and trade US instruments. If you buy $10K worth of stock they just debit your account like $13K.
 
Quote from trend_guy:

It's a great question, I believe with IB, you can open an account with CDN currency and trade US instruments. If you buy $10K worth of stock they just debit your account like $13K.
More...

They exchange currency everytime you buy a stock so if you're daytrading you're getting killed on the spread constantly.
 
They exchange currency everytime you buy a stock so if you're daytrading you're getting killed on the spread constantly. [/QUOTE]

my acct doesnt. when i make $ in USD then it stays in USD until i decide to convert it to cad$
 
Quote from steeldust:

They exchange currency everytime you buy a stock so if you're daytrading you're getting killed on the spread constantly.
More...


my acct doesnt. when i make $ in USD then it stays in USD until i decide to convert it to cad$ [/QUOTE]

Yes but if ur not converting then ur exposed to the currency fluctuations.
 
If your base currency is US$ then IB extends a margin loan in the currency of the instrument you are trading. When you close the position the margin loan is credited and you get your profit (take your loss ) in the currency you just traded in. If your losses mount then you will notice you are paying interest on that amount..unless you convert it to base currency. No foreign exchange really takes place when you trade in non base currency
 
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