I am just curious to know, I could be right off here. But if I have my broker account balance in AUD and all I trade is US futures and Equities. Does the broker give you crappy exchange rates when they convert the AUD to USD to execute the trade.
I am curious as I am an Australian resident that uses US brokers (Mirus Futures and IB) and I am wondering if I am getting stung by having my account in AUD instead of USD. Any input would be appreciated. Thanks
I can only tell you how it works at IB: If your base currency is AUD and you trade USD denominated securities then you will borrow the amount to buy from IB. You will have to pay interest for that amount.
All your P/L will be in USD and this P/L will not be converted automatically back to AUD. You have pick the time you want to convert back to AUD yourself and this will be done at the then current exchange rate. With IB you will have to pay commission for the exchange. The rate you get will depend on the amount you exchange: Above 25k you will get a slightly better rate. Search the IB-site for IDEALPRO.
The following user says Thank You to FGBL07 for this post:
You'd probably be better off contacting your Mirus representative directly or contacting their help on info [at-thing] mirusfutures.com. I found them helpful and quick in responding, and they can tell you better how Mirus Futures/RCG deals with this.
This is the reply I got from RCG regarding this issue if anyone else is interested.
"You can have your account in AUD. You can use your AUD to margin your USD trades but you would not want to cover a USD debit equity with AUD because you would be charged prime + 3 (currently 6.25%) on you debit USD. I your trading resulted in a USD debit equity I recommend converting some AUD to cover it. Currency conversions are not done automatically, they are only done when customers request them. Commissions are charge on any trades you make and we do not pay any interest on balalnces".