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Lesson 4 of 7
Today we’re going to take a look at how TWS displays currency balances and FX trades in the Account window, which we can open right here from the Mosaic Portfolio by clicking the Account button.
Here in the Market Value section we show you your real-time currency balances – and you can see I have several along with USD, which is my base currency. Some values are italicized; this is because I elected to display all balances in my base currency and those in italics are the converted values.
Below it, we have the FX Portfolio section, and if you’re an FX trader and trade currency pairs, you’ll appreciate this specialized view that treats an FX pair like an actual contract, so you can monitor some key metrics like your P&L and average price.
We call these two different currency sections our “Dual FX Display” and especially if you’re an FX trader, it’s important to understand the distinction between these values and how the routing destination you use for currency trades plays a crucial role in keeping the distinction clear.
Let’s assume that I am an FX Trader and I’m going to buy the Aussie which means I’ll buy the Aussie Dollar pair. You’ll see when I create the order that the TWS default routing destination for currency orders is IDEALPRO.
My order fills and as do all currency trades, the real-time balance for both currencies is immediately updated here in the Market Value section – Total Cash field. Additionally, the result of the trade also displays here in the FX Portfolio in the form of an FX trade, and that’s because the order went to IDEALPRO and we tagged it as an FX pair trade.
Now let’s do something a bit different. Instead of trading a currency pair like an FX trader would, I’m going to convert some of my Dollars to Euro. To do this we’ll buy the Euro Dollar pair.
And this is done similarly to an FX trade, but before we submit, I’m going to change the routing destination – and this is key – to FXCONV. This tells TWS that I’m converting currency, not trading a currency pair, and that it shouldn’t put this transaction into my FX Portfolio.
Let’s look at the Account Information window now that the order has filled. You can see that my EUR balance has increased, but more importantly I don’t have any new FX transactions in my FX Portfolio. Just as I planned.
Now let’s do the same thing, buy the Euro Dollar pair, convert currency, but this time I’ll “accidently” leave the destination as IDEALPRO.
After the order fills, look at our account information again. Same expected updated values in the Total Cash field, but look – now we have a virtual FX Euro Dollar position that I didn’t want – because I left the destination as IDEALPRO.
There is a way to fix this display. Because FX Portfolio represents a ‘virtual’ position, we can simply adjust the size of the position back to what we had originally, or to zero. We’re not buying or selling anything we’re just adjusting the display that we inadvertently messed up by routing a conversion to IDEALPRO instead of to FXCONV.
Notice that up here in the Market Value section, the right-click menu only allows me to close, or change the balances by trading. I can’t make any adjustments here because these are actual currency balances.
Now if you don’t trade FX and have no need to monitor these positions, simply collapse the panel here in the Account Information window, and you’ll hide these pairs in TWS as well.
But if you trade FX and like to monitor these contract positions, the bottom line is to check your destination and if you are converting currency and don’t want it treated as an FX pair trade, be sure to select FXCONV as your destination.
Remember you can practice with this in your TWS paper account. Thanks for joining us, we’ll see you next time.
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The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
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The order types available through Interactive Brokers LLC's trading platforms are designed to help you limit your loss and/or lock in a profit. Market conditions and other factors may affect execution. In general, orders guarantee a fill or guarantee a price, but not both. In extreme market conditions, an order may either be executed at a different price than anticipated or may not be filled in the marketplace.
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.
Hi, I have just started using TWS. Before using TWS, I filled some orders using IBKR desktop app and all the traders routed to IDEALPRO. But I don’t see any of them in forex portfolio section, neither in IBKR app nor in TWS. Can you please help me understand why this happens?
Hello, thank you for asking. The FX Portfolio – Virtual FX Positions section of the Account window is designed to show activity for currency pair trades for FX traders so that they can track average cost and running P&L on their currency trades. The FX Portfolio only shows open FX positions, not individual filled orders. To see your full order activity and execution reports, please check out the Audit Trail tool and Activity Statement.
Please view this User Guide for instructions to use the Audit Trail tool:
https://www.ibkrguides.com/traderworkstation/audit-trails.htm
You can view your Activity Statement any time here:
https://www.interactivebrokers.com/sso/resolver?action=RM_STATEMENTS
We hope this helps answer your question!
I’m having an issue in IBKR mobile. I went to my USD cash, clicked Convert, selected EUR, and apart from my EUR cash increasing, I see an active EUR.USD pair position open in my holdings. Will this forex pair dissappear at some point? I don’t want to trade forex, I want my cash converted so that I can trade EUR stocks and ETFs.
Hi Svetlin, thank you for reaching out. Clients from most countries in the world benefit from a multi-currency account at IBKR. Such accounts can hold multiple cash balances at the same time.
To open a position in a security that is denominated or settled in a currency you do not hold:
clients with a cash account
will have the AutoFX functionality automatically engage in “spot” currency transactions on the customer’s behalf in order to flatten negative cash balances. This functionality will only occur for cash accounts and only for buy orders, or
will need to convert enough funds to the denominated/settled currency to cover the cost of the trade prior to placing the trade.
clients with a margin account
(a) convert enough cash to cover the cost of the position in the denominated/settled currency, or
(b) open the position without converting currency and IBKR will extend a margin loan to cover the cost of the trade (please note that for option (b) when the position is closed the margin loan will close as well but the gain/loss on the position will remain in the denominated/settled currency). Please view this FAQ for more information: https://www.interactivebrokers.com/faq?id=29080117
IBKR’s FX liquidity providers quote currency pairs in accordance with standard industry convention which, in the case of the EUR and USD, requires entry of the pair as EUR.USD. As the industry does not support inverted quotes (e.g., USD.EUR) and the first currency listed is the one being bought or sold, converting USD into EUR requires that you buy the EUR.USD pair.
If you wish to specify your order in terms of USD to sell rather than EUR to buy, left click the Quantity field (in the Order Entry panel for Mosaic or on the order line in Classic). The quantity ladder will display. Toggle the quantity from the default currency to the alternate currency as needed. For example, if the forex pair you’re trading is EUR.USD, the default currency is EUR and the quantity displayed is in euros. When you toggle to the alternate currency (in this case USD) the value will default to the equivalent USD value based on the current exchange rate. Modify the USD quantity as needed and submit the order.
For instructions on how to convert currencies in all our trading platforms, see: https://www.interactivebrokers.com/faq?id=111454768
Also, you can view any available Cash Balances in your Activity Statement: https://www.interactivebrokers.com/faq?id=54825402
We hope this helps!
Hello. I have traded a FX pair few days ago but at that time I did not switch on the virtual FX position function. Therefore no virtual FX position is displaying. Now I have switched on the function. May I know how could I add this back to my portfolio so I could monitoring the daily profit and loss of the FX position?
Hi Jeff, thank you for reaching out. Virtual FX Tracking will allow your FX Holdings to be displayed as positions with associated P&L on Interactive Brokers platforms. To enable this feature, please take the steps outlined below.
Log in to Client Portal
Select the User menu (head and shoulders icon in the top right corner) followed by Settings
Under Account Settings find the Trading section
Click on Virtual FX Tracking
Select the check box in the top right corner to Enable or Disable Virtual FX Tracking
Finally press Continue to save your changes.
Once enabled via the above toggle, Interactive Brokers will begin reporting Virtual FX Positions in your account immediately in response to new FX trading activity. Your existing, real currency balances will not change as a result of enabling the Virtual FX Tracking feature. Similarly, disabling Virtual FX Tracking will simply remove all Virtual FX Positions (and related performance metrics) from your account’s portfolio, without affecting your account’s actual currency balances.
Please be aware that Virtual FX Tracking is not available in all accounts, and its availability (i.e., the availability of this toggle) is affected by both the properties of your account and your use of certain platforms that require Virtual FX Position functionality. Once Virtual FX Tracking is enabled for your account, this toggle will remain visible, permitting you to disable the feature as desired. However, once disabled, the toggle may not be immediately accessible again for re-enabling if the conditions for eligibility are no longer met. Please view this FAQ for more information: https://www.interactivebrokers.com/faq?id=738208960
To hide or show your Virtual FX Positions: https://www.interactivebrokers.com/faq?id=27271551
We hope this helps!
hello, i want to convert currency with no virtual portfolio. But there is no fxconv, only idealpro display. I did few times currency convertion by fxconv in the past. could I have any method to find the fxconv for select? thx.