Of course cash lah haha

Me kiasu kiasi, not like Ramjade

First try was a success. Pretty hassle-free execution. Almost all my USD, SGD and CHF are cleared. Now left my EUR and HKD only.

10 units of BIL ETf bought on NYSE ARCA during the premarket session. Auto FX conversion with no commission charged.

I counterchecked the rate with real time FX on Yahoo Finance and ICE data from TradingView. Damn good exchange rate man!

USD.HKD at 7.58 pm was 7.8099 (Yahoo Finance source, ICE quoted 7.8094 on TradingView). IBKR executed rate (from screenshot) was 7.8109. Markup of... 2 basis points!

USD.CHF at 7.58 pm was 0.8967 (Yahoo Finance source, ICE quoted 0.8967 as well on TradingView). IBKR executed rate (from screenshot) was 0.89675. Markup of... negligible basis points!

USD.SGD at 7.58 pm was 1.3533 (Yahoo Finance source, ICE quoted 1.3533 as well on TradingView). IBKR executed rate (from screenshot) was 1.35365. Markup of 3 basis points.

All in all, super pleased with the FX rates and auto convert features...

This post has been edited by TOS: Jun 11 2024, 08:47 PM

FT Private equity

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https://archive.ph/NXhKB

The paper can be found on SSRN preprint server here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4860083

FT Segantii Capital Management

Segantii bet against Canada Goose after call with Morgan Stanley
US prosecutor examined the conversation during its investigation of the Wall St bank

https://archive.ph/sC6Vt

------------------------------------

Remember CLOs? Yes, the one in 2008... They are back again!

FT Capital markets

European CLO issuance hits record rate as investors chase yields
Launches of vehicles that scoop up risky loans top €22bn in first five months of the year

https://archive.ph/56lCX

-------------------------------------

FT OpenAI

OpenAI expands lobbying team in battle to influence regulation
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https://archive.ph/XTbNb

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Tokyo Metro to be privatized?

FT Opinion | Japanese business & finance

Why an 89p metro ride is a recipe for ideological conflict
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Just to check with the sifus here on some technical details.

I received trade confirmation reports a few days after the trades and I find that they reversed some of the earlier long USD.SGD trades (IB auto-converted SGD to USD to buy BIL back then, but a few days later at US Eastern 5 pm, market close I believe, they reversed the trade to short USD.SGD, essentially converting USD back to SGD again).



Also, FX settlement period should be T+2 right (US shares changed to T+1, this we already know). How is it possible that IBKR settle the FX trades 1 day after I purchase BIL (i.e., same as the purchase of BIL ETF itself)? Shouldn't my FX trades settle at T+2 (i.e., 13th June?)

Yup, screenshot taken today:

Alright I know what is going on FINALLY! Now I feel like a forensic accountant, one Sherlock Holmes detective

Let's start from the beginning, one day prior to the deposit of HKD from my Mox Bank account and my purchase of BIL ETF. That would be 10 June 2024.

On 10 June 2024, here're my FX positions:

Currency	Amount
CHF	118.56
EUR	28
HKD	70.24
SGD	73.84
USD	679.27

--------------------------------------

On the morning of 11th June 2024 around 11.30 a.m., I deposited 781.45 HKD from my Mox Bank account. Let's assume instant settlement for now (we will deal with T+1 later), my account balance would look like:

Currency	Amount
CHF	118.56
EUR	28
HKD	70.24+781.45 = 851.69
SGD	73.84
USD	679.27

Then I decided to purchase BIL ETF and placed a limit order for 10 shares of BIL at 91.54 USD. The first order went through at precisely 7:54:15 am US Eastern, and I got 1 unit of BIL ETF, commission's 0.35 USD, so now the cash account is:

Currency	Amount
CHF	118.56
EUR	28
HKD	70.24+781.45 = 851.69
SGD	73.84
USD	679.27-91.54-0.35=587.38

Then, 3 minutes and 23 seconds later, on 7:57:38 Eastern, the next 9 orders went through, I got another 9 units of BIL ETF and this time NYSE rebated me 0.02 USD. So, at 7:57:38 Eastern, the account balance looks like:

Currency	Amount
CHF	118.56
EUR	28
HKD	70.24+781.45 = 851.69
SGD	73.84
USD	(679.27-91.54-0.35)-(91.54*9)+0.02=-236.46

With negative cash balance, IBKR will now have to convert the money from my other currency accounts. Based on my guess, they started by deducting my CHF, HKD and SGD accounts (because the timestamp of those trades in the trade confirmation report were exactly 1 second after my BIL execution, i.e., 7:57:49 eastern).

Let's see how the money was deducted, based on the trade confirmation report. 3 FX trades were recorded:

1. Sold 118.51 CHF at CHF.USD = 0.89675 to get 132.16 USD. No commissions (at least direct commissions...)
2. Sold 388.90 HKD at USD.HKD = 7.8109 to get 49.79 USD. No commissions.
3. Sold 73.80 SGD at USD.SGD = 1.35365 to get 54.52 USD. No commissions.

In tabulated format, at 7:57:39 US Eastern:

Currency	Amount
CHF	118.56-118.51 = 0.05
EUR	28
HKD	70.24+781.45-388.90 = 462.79
SGD	73.84-73.80 = 0.04
USD	(679.27-91.54-0.35)-(91.54*9)+0.02+(132.16+49.79+54.52)=0.01

So, the 3 FX trades above pretty much brought back the USD account balance to almost 0.

The next few transaction records were seen around 5pm US eastern. Let's proceed to understand what IBKR did at 5pm US Eastern. 3 transactions were recorded:

1. Sold 0.04 CHF at CHF.USD = 0.89787213 to get 0.04814124 USD. No commissions (at least direct commissions...)
2. Sold 0.04814124 USD at USD.SGD = 1.35285165 to get 0.07 SGD. No commissions.
3. Sold 0.00487447 USD at USD.SGD = 1.35264869 to get 0.01 SGD. No commissions.

In tabulated format, at 5 pm US Eastern:

Currency	Amount
CHF	118.56-118.51-0.04 = 0.01
EUR	28
HKD	70.24+781.45-388.90 = 462.79
SGD	73.84-73.80+(0.07+0.01) = 0.12
USD	(679.27-91.54-0.35)-(91.54*9)+0.02+(132.16+49.79+54.52)+0.04814124-0.04814124-0.00487447=0.005

Now it becomes pretty clear what IBKR was trying to do. The CHF cash balance was too low, so they closed it by selling CHF and converting it to USD. But then the USD account balance was too low as well, so they convert everything in USD to my base currency SGD. By 5 pm US Eastern, my CHF and USD balance were 0 and closed. (I have no more USD and CHF cash at IBKR). So, adjusted for rounding error, at 5 pm US Eastern, my currency balance was actually as follow:

Currency	Amount
CHF	0 (closed)
EUR	28 (no change from the start)
HKD	462.78 (rounded down from 472.79)
SGD	0.11 (rounded down from 0.12)
USD	0 (closed)

--------------------------------------------------

Now we can "switch on" the T+1 settlement for currencies. By 12th June 2024, this was the account balance:



Notice CHF and USD account balances no longer exist.

------------------------------------------------------

Ok, so far so good. So, what was with the funny transaction I raised earlier on the 13th of June?

Well, on 13th of June MSFT paid a dividend of 0.75 USD a share to my brokerage account. IBKR deducted 30% withholding tax (0.23 USD) and passed on 0.52 USD to me. It turned out that since my USD balance was now zero and closed permanently, IBKR would not reopen my USD balance and deposit 0.52 USD into it. Instead, IBKR would auto-convert 0.52 USD into SGD (my base currency).

On 5pm US Eastern, 0.52 USD was converted to SGD at USD.SGD = 1.35092174 to obtain 0.70 SGD. And funnily enough the settlement period for this dividend auto-conversion is T+0, the same day!

That explains the last piece of the puzzle:



So, on the 13th of June 5pm US Eastern, my currency balance looked like:

Currency	Amount
EUR	28
HKD	462.78
SGD	0.11+0.70 = 0.81

Which remains the case until today:



------------------------------------

In short, nothing mysterious here. Firstly the CHF and USD account balances were too low so IBKR "forcefully" converted the remaining balance to SGD (my base currency). And with no more USD cash balance, all subsequent USD cash dividends will be auto-converted to my base currency (SGD) automatically.

This post has been edited by TOS: Jun 19 2024, 09:20 AM

All FX conversions done on IdealFX.



This post has been edited by TOS: Jul 3 2024, 02:14 PM

Mean reversion doesn't always work

Bloomberg: Popular Arbitrage Trade Backfires as TSMC Frenzy Grows in US

ADRs have surged more than the Taiwanese stock this year
Their premium this quarter is at the highest average since ‘09

https://www.bloomberg.com/news/articles/202...nzy-grows-in-us

(In case you hit a paywall, try this one: https://archive.ph/JdihW )

In another news:



https://www.digitimes.com/news/a20240617PD2...production.html

---------------------------

FT Opinion: Inside Business

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Shares in the semiconductor company have risen strongly but still lag behind Nvidia and other chipmakers

by JUNE YOON

https://archive.ph/hLtPb

FT Economics books

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Martin Wolf selects his best mid-year reads

https://archive.ph/USztp

OMG Samsung Galaxy S25 to use Qualcomm's Snapdragon 8 Gen 4 (fabbed by TSMC N3E) exclusively because their own Exynos 2500 yields are too low.

https://www.chinatimes.com/realtimenews/202...headl_p01&chdtv

https://www.notebookcheck.net/Samsung-Galax...s.849166.0.html

https://soyacincau.com/2024/06/19/samsung-g...dragon-8-gen-4/

https://twitter.com/mingchikuo/status/1802737528874955169

Big business for TSMC lol

This post has been edited by TOS: Jun 20 2024, 10:04 PM

Samsung’s 3nm Yield Reportedly Below 20%, Struggling for Mass Production

https://semiwiki.com/forum/index.php?thread...oduction.20504/

-------------------------------------

TSMC Reportedly Secures Another AI Opportunity, Winning Order from SK Hynix

https://semiwiki.com/forum/index.php?thread...sk-hynix.20505/

For those wanting a piece of Airbus stock, it tanks 12% today after earnings guidance are out...

https://www.google.com/finance/quote/AIR:EPA?hl=en&window=1Y

Cross-posted on USA Stock Discussion thread.

WSJ EXCLUSIVE | FINANCE

Want to Bet on the CPI or Jobs Report? A Prediction Market Is Coming to This Brokerage
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https://www.wsj.com/finance/want-to-bet-on-...share_permalink

Witnessing AutoFX conversion in action again. USD and HKD accounts closed, only EUR and SGD accounts left.



Looks like the trades are not all settled on the same day, despite similar initialization time. Some trades settle on the same day, some settle T+1.

This post has been edited by TOS: Jun 29 2024, 08:52 AM

--------------------------------

I also know why my CHF was not converted directly to SGD (base currency) last time (see post above): there are no CHF.SGD or SGD.CHF currency pairs available... So my CHF was first converted to USD then from USD to SGD again.

We deduced the rule here: IBKR will close your FX positions by converting the remaining currency(ies) to your base currency directly if possible. That's always the first option. If no direct cross rates are available, the currency(ies) whose position(s) is/are to be closed (e.g., CHF) is/are then converted to another intermediate currency (USD) before undergoing another round of conversion to your base currency (SGD).

This post has been edited by TOS: Jun 29 2024, 09:02 AM

FT Charts that Matter | US

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https://www.ft.com/content/a4e55388-0924-42...2b-c93ce5e0b993

https://archive.ph/OGm7s

------------------------

FT US retail

Target loses cachet with shoppers as inflation and competition bite
Backlash to Pride wares was only the start of recent woes as reliance on discretionary goods took a price-conscious hit

https://archive.ph/8YhXo

----------------------------

Good news for NESN.SW shareholders?

https://www.reuters.com/business/retail-con...per-2024-06-29/

This post has been edited by TOS: Jun 30 2024, 12:23 AM

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https://www.ft.com/content/8f182b91-da7e-4c...e7-8070f70b4ee4

https://archive.ph/Ft6W0