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Overview

With IB's Universal Account, you can trade foreign exchange worldwide from a single account with the TWS FXTrader, an order management tool that's been designed specifically for Forex traders, with a world-class competitive platform and quality of market for your Forex trades.

This completely customizable system provides an optimized trading interface that can be modified to suit your trading preferences.

A significant difference from many other FX platforms is that Interactive Brokers LLC ("IB") acts as agent and does not take a position on the other side of the trade. Our only priority is to execute the order at the best possible price.

We use the same smart routing technology as for US stocks and options by continuously monitoring the quotes from various liquidity providers, and routing your order to the provider who at that moment in time appears at the top of book.

Disclosure

There is a substantial risk of loss in foreign exchange trading. The settlement date of foreign exchange trades can vary due to time zone differences and bank holidays. When trading across foreign exchange markets, this may necessitate borrowing funds to settle foreign exchange trades. The interest rate on borrowed funds must be considered when computing the cost of trades across multiple markets.

Costs to Trade at IB

• IB is not the counterparty on your trade, so our only interest is to deliver the best execution.
• Interactive Brokers unbundles all fees in the interest of transparent pricing, unlike Forex brokers that state that they do not charge commissions for FX trades and instead build their profits into the bid ask spread.
• Instead of adding 1-5 pips onto the spread, Interactive Brokers passes through interbank quotes from our bank partners directly to our customers and then charges an explicit 0.2 bps commission.
• Our forex customers can benefit from lower forex trading costs, because quote markups at other brokers are generally much larger than our explicit low commissions.

Interbank Platform

IB offers FX traders direct access to interbank prices through our Smart routing technology that combines quotation streams from 13 of the world's largest foreign exchange dealers in the global interbank market. This results in substantial liquidity and tight spreads – some as low as ½ PIP wide!

In TWS, you can directly trade currencies or convert the currency balances you get when trading products denominated outside your base currency.

FX order routing has been simplified with all currency orders now routed to IDEALPRO for best-execution functionality, regardless of the size of the trade. Trade quantities for less than the interbank minimum (~ 25,000 USD) will be routed as an odd lot trade and filled 1 pip outside the interbank BBO.

We offer trading in 13 currencies including USD, EUR, CHF, GBP, SEK, NOK, JPY, AUD, NZD, HKD, CAD, MXN, and KRW (with special conversion functionality).

TWS FXTrader

Universal Account features include access to global trading products and FX trading permissions and can be updated at any time through Account Management.

From the Trading Tools menu, select FX Trader and a standalone window opens. FXTrader operates with the standard elements of our order management modules provided at the top and a customizable grid of currency cells with major currency pairs already listed in a 3x3 grid of "trading cells". Overall order, trade and portfolio information is displayed in the familiar trader tool layout at the top of this window.

Each currency pair occupies its own "cell," complete with market data and order information, where you can create, transmit and cancel orders with a single click.

The price display emphasizes the critical portion of the bid/ask, and conveys price movement at a glance by showing an increasing price in green and decreasing price in orange.

The page is completely customizable; allowing you to increase or decrease the number of cells in the grid, invert a quote, change colors, and modify the way price and size is shown.

Each trading cell in FXTrader has many helpful features including:

• Color coding to distinguish upward/downward movement in price/size.
• Cancel icon to quickly request cancellation of all orders for the currency pair.
• Easy access to the configuration settings with the wrench icon.
• Quick-click to view inverted quotes.
• Message line in currency pair cell to describe order details.
• Book icon with mouse-over information that displays when there is a price improvement opportunity in small order book.
• Optional display of contract style position and P&L information.
• Right-click access to TWS features

• Quotes are displayed in individual cells which use the same color defaults as the main TWS screen.
• View is optimized to show you the key elements of price display emphasizing the important part of the price.
• Volume appears below the quote - with an uptick/downtick color indicator.
• Book icon (Small Order Book Indicator) indicates there's a quote in the small order book that's better than what's displayed. Ideal is treated as an odd lot small order book on this system. Hover your cursor over the book for a tool tip with details.
• Cells can be dragged to reposition in the grid and contracts can be dragged from the contract label area to your trading page to create a market data line.
• Maximum limit of 16 cells will display in a 4x4 grid.
• While designed for Forex this feature works ideally to trade Futures side by side with Forex. Same facilities available for futures, it's just optimized for Forex and will allow traders to view and trade Forex side by side with Globex futures.
• Inverted quoting:
  • FX Quote is expressed in Spot terms but you can choose to display as the Globex futures quotes (invert) using icon in upper right by clicking the double green arrows at the top right corner of a cell.
  • Inverted displays are identified by an asterisk after the title, and a blue "inverted" icon in place of the green double arrows.

Create Orders

Market is structured like an ECN with an order book that allows you to set orders away from or between the markets, and trade with other IB clients as well as with the liquidity providing banks.

• Minimum order size for Interbank rates ~25,000 USD equivalent. You can find the order limitations on our web site.
• If you enter a small order at less than the interbank minimum, you will get a warning message that the order is too small so it will be routed to the odd lot order book.

• If accepted, these small orders will actually get routed to an odd lot facility with small order quote 1 pip outside the interbank BBO.
• For currency conversions, the addition of the FXCONV destination allows you to identify the trade as a currency conversion which will no longer affect the FX Portfolio section. Previously currency conversions were also reflected in the FX Portfolio section and needed to be manually adjusted out.

For a list of order types available. Refer to Exchange page Global tab for specifics.

• Submit an order by clicking the desired bid or offer price. The order displays in the cell and on the Order Management panel at the top of the page. Modify order parameters if desired and click Transmit.
• For those who want to trade very fast and very aggressively, there is a check box to transmit instantaneously. A disclosure box pops up if you choose this option.
• Each cell shows working orders for that contract.
• Last sale is not available as a price trigger method. Midpoint must be used as a trigger for stop, stop-limit and trailing stop orders due to absence of last sale data.
• Trades tab in the order management panel show filled orders submitted in the FXTrader.
• View position, average price and P&L – in a contract style view – in each currency cell and in the FX portfolio tab. This displays a specialized view created for Forex traders and does not necessarily represent your actual cash positions which can be found and traded in the Market Value section of the Account window.

• Modified orders will be treated as the request to cancel and replace an existing order with a new order. This may have the effect of subjecting modified orders to commission minimums as if they were new orders.
  • Residual small orders will still be executable in IDEALPRO. Example: submit an order for 50,000 – 40,000 fills, but leaves a 10,000 residual. The 10,000 will be executable on IDEALPRO, even if the price is changed.
  • But if the size is changed, it will be deemed to be a new order and thus subject to the minimum order size restriction.
• IDEALPRO trades executed after 17:00 (5pm) ET may be considered the next day's trades for statement purposes.
• Because of the limits of trade precision, small residual balances may display in the Market View section of the Account screen. These non-base currency balances less than or equal to 5 USD equivalent will be swept back to the account's base currency after settlement.

• Prefer Speed over Price -- if you are more concerned getting a fill on FX orders greater than 3 million than getting the best price: Select Prefer Speed Over Price.
  • When indicating that speed is preferred, this informs the SMART Router that it is OK to trade outside the NBBO to attempt to get the faster fill.
  • When disabled (default) this indicates that price is preferred, execution of large-sized orders may be delayed due to dealer order size restrictions.
  • To set this feature on a per-order basis, use the Misc tab of the Order Ticket in TWS. To set this as an Order Preset, use the Timing section of the Forex Order Presets page. API customers can define this setting for ALL orders sent via the API by enabling the feature on the API page of Global Configuration. This feature is not available on a per-order basis for API orders.

To trade more efficiently you can predefine commonly used order criteria as defaults. A "default" order parameter automatically appears on your order management line when creating an order. The system uses default values to save time and to expedite entering orders. So instead of a blank order management line, when you create an order each field is pre-filled with a default value.

• Order criteria can be manually changed on your trading screen before you transmit an order, but you'll save time by defining your default order parameters.
  • Right click and choose Configure | Order | Presets or use Ctrl+D in a cell to set the default values
    • Select your default order size, by currency.
    • Enter your Default Stop Order offsets amount in pips for use in auto-stop or bracket orders.
    • Even build several preset strategies for speed and consistency in order creation.
• Presets expand the usefulness of default order settings by allowing you to create multiple sets of order defaults and apply them from the trading page using the Presets field.

Currency Settlement Holidays

• Standard settlement periods for most currencies is 2 business days, although some pairs (ie: CAD/USD) settle next business day.
• For a date to be a valid settlement date for an FX transaction, the central banks for both currencies must be open for settlements.
• When either currency has a 'holiday' on the target settlement date, settlement is deferred until the next valid business day for both currencies.
• If you have large FX positions this may have significant impact on settled cash balances and you could incur significant financing and/or carrying costs. Refer to our Currency Settlement Holiday page for more information.

Account Window Dual FX Presentation

The Account window displays your actual currency balances, which may result from FX trades, conversions, or trading products in another currency in the Market Value section. The FX Portfolio section was designed to allow tracking of average cost and a running P&L of a "virtual" position.

Market Value - Real FX Balances

• Real-time actual currency balances display in the Cash field of the Market Value section.
• All assets in each currency are displayed in the Market Value section and combined to determine a single net asset value in that currency.
• Right click on a column header in the Market Value section to view balances in your base currency (translated balances are italicized.)
• To quickly convert a non-base currency position back to your base currency, go to the cash balance line in the Market Value section, right click and select close currency position. Trade is submitted immediately.
• Because of the limits of trade precision there may be small residual balances in the various non base currencies which will be converted automatically at the end of current trading session and will appear in your statement for the day.

FX Portfolio - Virtual FX Position

• The FX Portfolio section displays a "virtual" position – a specialized view created for FX traders and does not represent your actual cash balances for the associated currencies which can be found and traded in the Market Value section of the account window.
• For FX Traders, this section gives the ability to see currency positions in a 'contract style' view – which is the basis for a running P&L and average cost. The 'virtual' position display is consistent with how we display other contracts.
• To avoid having currency conversions reflected in this panel, use the FXCONV destination on the order line.
• The display of virtual FX positions on TWS windows is linked to the your decision to hide or display the FX Portfolio section of the Account window. If collapsed, the Portfolio trading page will NOT show currencies. If the FX Portfolio is displayed on the Account window, currencies with "virtual" positions will be visible in the quote monitor.
• To remove currency positions from display, condense the FX Portfolio panel by clicking the arrow to the left of the panel title.

Automated FX Transaction Decision

When trading products denominated outside your base currency, you will accumulate gains/losses in the non base currency. You can either submit an FX Hedge at the time you place the order to mitigate the currency risk, or choose at any time to convert the non base balances back to your base currency.

When you submit an FX order to convert a non-base currency balance, the transaction is reflected in both the Market Value section for both currency balances and will also update the virtual position -- unless you select FX CONV as the destination.

The new FX order analysis feature (build 910) when you submit an FX order, based on your positions and balances, TWS will attempt to identify whether you want an FX pair trade or a currency conversion, and will ask you how you want the currency trade to be considered.

• For a Currency Conversion -- only the associated currencies in the FX Balance will be affected.
• Selecting FX Trade creates the virtual position in the FX Portfolio.

• Check Let TWS make this determination automatically in the future at the bottom of the confirmation box. Help Icon provides a link to more detailed information.

Configuration

FXTrader is customizable on many levels, from the color and number of cells to the method used to calculate order quantity.

• Create your own look and feel with Configure icon on the toolbar.
• Choose your display preference from the themes provided.
• Choose how many cells to display – max is 4x4.
• Click and drag an individual cell to reposition in the grid.
• Jump to order- Automatically positions the cursor on a newly created order in the Orders panel.
• Allow Numerator sizes- allows you to select the quantity of the order expressed in either currency. When activated, from the currency cell order row select the currency and see trade quantity in order management row expressed in the selected currency.

Additional functionality and navigation shortcuts provided with a right click in the currency pairs cell:

Several Hotkeys have been pre-set. To view the keystroke combinations use Ctrl+H. Click Ctrl+H a second time to open a window to set your own hotkeys.

Chart Currency Movements

To access charts from the FX Trader use the right click menu on the cell you want charted.

• This brings up a default currency layout with the chart displaying MidPoint as the primary focus.
• Due to the absence of last sale data, currency charts will not display trade data.
• Use the Midpoint in the What to show field of the Chart Parameters window.