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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 feature 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”) remains a completely neutral agent and does not take the counterparty of the other side of the trade. Our only priority is to execute the order at the best possible price.

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

We provide two vehicles for the exchange of currencies, IDEALPRO, interbank platform, which allows a customer to trade Forex and IDEAL which allows a customer to convert their balances from one currency to another.

IDEALPRO is for larger orders – greater than 25,000 USD equivalent which are routed to the interbank market. IdealPro is actually a SMART routed venue where we consider each liquidity provider as an exchange.)

• For the trading of currencies, IDEALPRO should be utilized.

IDEAL is our small order book facility for orders under $25,000 USD or equivalent and should be utilized to convert funds -- the closing out currency balances you get when trading products denominated outside your base currency.

The main function for Ideal is to convert those funds back to your base currency. ie: trading in Euro stocks or Euro futures generates a Euro balance (+ or -). To convert it back to US dollars use Ideal.

• So IDEAL should be utilized to convert funds, not to trade currencies.
• You will find that our currency exchange rates are generally better than exchange rates offered by retail banks or credit card companies.
• While our quoted rates are generally superior to rates available at a bank, orders for less than the interbank minimums will actually be routed to the IDEAL small order facility with an imputed small order quote 1 pip outside the interbank BBO.

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

Universal Account features that include trading products outside your base currency and FX trading permissions are not available for cash accounts. Since a margin loan is created in the non-base currency, to trade currencies you will need a margin account for forex trading. Account permissions can be upgraded through Account Management.

• When you buy or sell securities, futures, or currencies denominated outside your base currency a margin loan is created in the non-base currency (collateralized by your base currency.)
• All assets in each currency are combined to determine a single net asset value in that currency.
• Refer to the website for the margin requirements and leverage rates for each currency.

Trading Cell Components

FXTrader displays a 3x3 grid of "trading cells" designed to complement the way an FXTrader operates, with the standard elements of our order management modules provided at the top. 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.

The trading cell in FXTrader has many helpful features including:

• Color coding to distinguish upward/downward movement in price/size.
• Cancel icon to request cancelation of all orders for the currency pair.
• Easy access to the FX Trader configuration windows.
• 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.
• When you first open the FXTrader, the screen will display the major currency pairs already loaded.
• 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.
• Limit of 16 contracts will display in the 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:
  • 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.

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.

Order Limitations

• Minimum order size for Interbank rates ~25,000 USD equivalent. You can find the order limitations on our web site.
• There is a Maximum size per order at ~5 Million USD. Multiple orders can be stacked up and entered rapidly.
• If you enter a large order and direct to the small order book, we will route the order to the best execution on the interbank market.
• If you enter a small order on IDEALPRO at less than the interbank minimum, you will get a warning message that the order is too small for IDEALPRO, but it can be accepted anyway.
  • If accepted, these small orders will actually get routed to the IDEAL small order facility with small order quote 1 pip outside the interbank BBO.
• IB will break cash Forex trades at IDEAL more than 3% away from the market.

Order Types

Order types available are dependent on the IDEAL/IDEALPRO destination. Refer to Exchange page Global tab for specifics.

• Predefine order strategies, and default order offsets to expedite order entry.
• 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.
• 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.
• Each cell shows working orders for that contract.
• 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.
• For those who want to trade very fast and very aggressively, there is a check box to transmit instantaneously. A disclaimer pops up because this is dangerous if you don’t know what you’re doing.

Order Management

• Modified orders will be treated as the cancellation and replacement of 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.
• 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.
• IDEALPRO trades executed after 17:00 (5pm) ET may be considered the next day's trades for statement purposes.

Order Presets

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.
• Access Order Presets from Configuration | Order | Order Presets or with a right click on any order row. For example:
  • 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 preset several 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.

Market Value

Real-time FX position value displays 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.
• To 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.

FX Portfolio

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.

Important - If you are tracking the contract style P&L values in the FX Portfolio be aware that doing a currency conversion will change the ‘virtual’ position.

• FX Portfolio ‘positions’ reflect:
  • direct currency trading as well as
  • indirect currency trading – the currency conversions done in order to close out non-base currency positions.

Since this window tracks currency trades, a currency conversion of your trade gains or losses back to your base currency will distort the virtual position tracking.

If you are tracking the ‘virtual position’ values, a currency conversion will appear as if you increased/decreased that virtual position.

• Before doing a currency conversion, note virtual position size & avg cost.
• After your conversion trade executes you can re-set the virtual values with the Adjust Position and Cost command:
  1. Right click on the position in FX Portfolio section.
  2. Select Adjust Position and Cost.
  3. Enter the position size and average cost and click OK.

Please note that this feature does not implement any changes to your portfolio. It is designed to allow you to separate out currency exchanges from FX position values.

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 cell:

Several Hotkeys have been pre-set. To view the keystroke combinations use Ctrl+H

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.