IBKR CS replied that when IBKR deducted the GBP cash in my account for the Preferential Offering, the forex conversion to GBP was not yet settled at that time, so I need to pay interest to IBKR.

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Well, I can understand that we should wait T + 2 working day, for the trade of stock to be settled, before we can proceed to perform further trading of the stock, such as selling the stock. However, the forex conversion in IBKR should immediately be settled, and the SGD cash in my account was already deducted to pay for the forex conversion.


Moreover, I did not withdraw GBP cash out from my IBKR Cash Account, because GBP cash was used to pay for Preferential Offering.


I just cannot really understand why we should wait T + 2 working day, for the forex conversion to be settled.

This post has been edited by kart: Feb 19 2024, 08:13 AM

kart did they deduct 1.05 pound? Or did they deduct from SGD balance?

You seem to be converting using other means, since I could never do a limit order when converting sgd to USD. It's fixed to market order only, click to see how i usually convert

So my hunch is you are making a trade (that happens to be forex), rather than IBKR's currency conversion. But I'll have to verify that later

This post has been edited by Medufsaid: Feb 19 2024, 09:15 AM

here you go... https://www.interactivebrokers.com/en/educa...nt-holidays.php

don't assume...

your motivation to sell the Dec 2023 tranche is purely to avoid seeing red... for that tranche

your balance remains the same regardless of selling the first few tranches or the last few tranches...

This post has been edited by dwRK: Feb 19 2024, 11:17 AM

Medufsaid

The fee and the interest are deducted from the base currency. So, I changed my base currency to GBP.


After IBKR deducted GBP 1.05 from GBP cash in my IBKR Cash Account, I changed my base currency back to SGD.


The screenshot shows how I convert SGD to GBP with limit order, via "Forex" tab in IBKR website.





I believe that you use "Convert Currency" tab.


dwRK

So, we are required to wait at least T + 2 working day, for the forex conversion to be settled. Sigh, it is a somewhat painful lesson learnt for me, since I need to pay the interest to IBKR.


That time, Corporate Action Manager in IBKR website showed the allocated units and allowable excess units for the Preferential Offering, at a date later than usual. I needed to make sure of the number of the allowable excess units, before I could deposit the required amount for the forex conversion.

This post has been edited by kart: Feb 19 2024, 11:35 AM

now the mystery is why i don't see this in my SGDUSD conversion. currently i'm (like many here) exploiting the "recurring investment" bug/loophole to convert SGD to USD instantly for free upon stock purchase

This post has been edited by Medufsaid: Feb 19 2024, 11:56 AM

you have sgd sitting in settled cash account... ibkr takes that, does the conversion for you, and buys your recurring stock... all is well...

he had just enough sgd as settled cash... when he buys gbp, settled cash account becomes empty waiting on T+2...

hmm..https://www.reddit.com/r/singaporefi/commen...y_user/jpy65z7/

ok this doesn't make sense either as I bought $IBIT immediately after manually converting to USD in mid Jan.

When does the interest get reflected in statements?

This post has been edited by Medufsaid: Feb 19 2024, 02:33 PM

your's is cash or margin/portfolio account?

you say buy ibit immediately was it market order or limit order executed same day as your manual conversion?

interest should get reflected next day i think... ibkr has a doc somewhere showing the maths and how its done...

afaik... you buy and ibkr auto convert... this is considered 1 trade, so no t+2 for fx conv leg... if you do fx conv 1st, then buy... is considered 2 trades... 1st trade must settled 1st...


This post has been edited by dwRK: Feb 19 2024, 03:07 PM

i'm on cash acct, $IBIT via limit order. FYI i started Jan, 2024 with U$0.13, rest all SGD (recurring will always leave behind some cents)



i've already manually input my trades in an excel weeks ago so any interest charged should've resulted in my excel not tallying with IBKR's actual balance

This post has been edited by Medufsaid: Feb 19 2024, 03:36 PM

hmmm... i got no ideas for further forensic checks...

i wonder if base currencies plays a part...

anyways going forwards... maybe next time you manually convert sgd to usd... see how fast it gets settled... yada yada...

Same amount of freed up capital but why would i want to sell my earlier positions entered at a low of $51 and $62 when i can let these run for many years vs liquidating my last purchase entered at $138 which will turn negative at the next correction? I let winners run in general.

The difference is in the entry prices and to keep my winners (early positions) running vs holding a negative position during the next correction. I dont want to be freeing up capital from stronger winning positions when i have a choice of closing a position that will go negative on the next leg down.

There is NO difference except in your mind. This is pretty much a version of the sunk cost fallacy.

Today, right now, you have X units of the stock. It DOESN'T MATTER when you bought the stock, and how much the price was at that time. Because you have those X units now, and after some selling you will have Y units. Those units price have no difference whether or not you bought them last year or in 2019.

If you know there's going to be a correction, then your 'letting winners run' is actually costing you money. Because if you sold right now, then there's a correction, you have both locked in your gains AND will be able to repurchase at a lower price.

Well there's enough shares to sell some covered calls

Selling my positions now will lock in the gains but no correction in the market now will take prices close to what they were back in 2018. So re-entering the market after a near term correction would essentially mean i have a much smaller buffer between my entry price vs future price. I grew my portfolio since 2018 with USD900K+ capital to a fund value of USD2.63mil today having 80% of my original positions remaining the same but 20% were fine-tuned before corrections in order to maximise the buffer.

I still don't understand after like 2 pages reading. Just making sure I'm on the same page... There's literally no difference in terms of the final outcome, do you agree?

Technically speaking, I GUESS it would have different unrealised profit vs realised profit on paper... But that's kinda meaningless, because if you REALLY want to pocket everything and close shop, they'll all still turn into realised profits, so I don't understand your insistence...

The intent is to close out the last position entered in Dec 2023 and to recoup the capital from that position and then re-enter at a lower price for that stock/another stock. Either way i get the same capital working from a lower price entry price base for that position.

Okay, in my opinion definitely you're prioritizing a certain kind of optics over reality here.

Let's say, 2018 you bought ABC with price 100 USD.

2022 you bought ABC with price 230 USD.

Now (2024) the price is 250 USD. You anticipate a correction. Imagine you have perfect ability to tell the future, you know that price will drop to 215 USD later this year.

Your intention is to sell all your 2022 units to 'reset' that tranche, gain a bit of profit, and once correction you can re-enter. But your 2018 units you want to hold so that you can 'let winners run'.

(If anything wrong with above simple example please make corrections).

What I (and some others) are saying is that none of the above matters except for annual tax reporting. And what I'm saying in addition is that if you sell ALL your units now (at 250 USD) you have already made 150% on your 2018 units. Re-entering at a higher entry price would not lose you any money. You are LOCKING IN your gains (this can actually be a smart play, depending on the portfolio/horizon), which is objectively a good thing and doesn't affect your fund value at all.

Secondary example, if stock ABS would one day drop to 110 USD price, would you still hold on to it because you bought it cheaper in 2018? If you had sold and bought after correction at a higher entry price would that have convinced you to sell it earlier? In both those cases then you're probably engaging in a form of sunk cost fallacy.

The sentence in bold is what you (and others) keep repeating without providing the WHY

Re-entering at a higher price point doesn't lose me any money for sure UNTIL there is a correction/crash (which happens more often that most ppl anticipate) and then those positions go negative (again no loss because its still on paper) but it does lower my buffer.