Interactive Brokers Currency Holdings

[Bsrr]

With an Interactive Brokers account you can hold other currencies in your account by purchasing them using your base currency to do so. The base currency for my IB account is USD. I have purchased EUR and CAD and these transactions download into FM as a redemption from your base cash/currency. However, there is no off setting "purchase" of the "new" currency that downloads as an offsetting positive to your IB cash balance or as new currency asset.

When you purchase a stock in IB using one of your other currency holdings that is not your base currency, IB deducts that transaction from your that currency holdings in your IB account. The downloaded stock purchase transaction shows up in FM as redemption from your FM IB account in your base currency (USD in my case) and reduces USD by the purchase amount of that transaction.

It appears that what needs to be done is to delete the downloaded currency transactions in your FM IB cash account that reduced the base cash (USD) since the purchased stock transaction is doing that also. Does this seem correct? Does this make sense? Thanks.

[Mark]

Hi Bsrr,

As you've noticed, these don't fully come in cleanly. When you buy currencies from IB they report these as investment banking transactions, but don't specifically say what currency was bought/sold, other than in the memo. Investment banking transactions will always go into the default cash account assuming you have on the advanced option to import these.

When you buy some foreign stock with foreign currency, you could set this up like this:

- IB Account
- <USD Cash>
- FX1 Account
- <FX1 Cash>
- FX2 Account
- <FX2 Cash>

where you assign FX1 Cash to be the default for the sub-portfolio FX1 Account, under your IB Account. Basically, you have 1 global default cash account, and then a sub-portfolio for each currency, with that currency assigned as the default cash.

If you buy FX1 Cash with USD Cash, you'll want to make a buy in FX1 Cash and a sell in USD Cash.