Questions about Interactive Brokers

[tanguy]

Hello everyone,

I recently opened an Interactive Brokers account and started investing this week.

I have two questions about stuff that happened:

1. I bought some shares of CHSPI for 400 CHF. I am using fractional trading, so it was 2.8332 shares at 141.18CHF. For that, I was expecting to pay 3.88 CHF in fees (as shown in the trade preview). In the trade tab of interactive brokers, it appears I paid 3.88 CHF in fees. but when I look in my portfolio, the cost basis is 402.37CHF which is not 141.18 * 2.8332 + 3.88 but rather 141.18*2.8332 + 2.38. So I think I paid only 2.38CHF of fees, but I don't understand, there seems to be a discrepancy between the trade tab and the portfolio tab. Can someone explain this to me?

2. Then I converted some CHF to USD, bought some ETF shares, and was left with 3.61 USD. However this morning I noticed that the USD had been converted back to CHF (I think without any fee because I got back 3.25 CHF). Did I unintentionally click a button (Convert All to CHF maybe?) or does IB convert back small amount back to the main currency after some time?

I am sorry for those beginner and a bit technical questions, I am just trying to figure out what is happening.

 

[Baptiste Wicht]

HI tanguy

1. Sometimes, the trade window displays a range of fees (min-max) instead of displaying an absolute value. Could it have happened in your case? But that does not explain the discrepancy between both tabs. You can generate an activity statement (in the Reports tab) and you should have all the final numbers.

2. IB should never convert any amount by itself. That's weird, indeed. Again, you can generate an activity statement and you should be able to see what would have happened.

 

[tanguy]

1. The trade window indeed displayed a range of fees, and if I remember correctly 3.88CHF was the max of the range. I generated the activity statement, and there the fees are also 2.38CHF. I guess there is a small bug in the Orders & Trades tab and it shows the max of the range, but then applies the effective fees in the portfolio.

2. I can only generate the activity statement up to the 04-04-2024. There I can see that I still hold both CHF and USD, but that was indeed the case yesterday. I think the currency conversion happened today (05-04-2024), so I'll wait until tomorrow to see the activity report.

I'll try to keep you updated with what I found,
Thanks a lot for your answer

 

[AGZH86]

you have to look at the statement the day afterwards, if it says 2.38 then it's right, i had the same. don't trust the live figures you get 1 sec after trading

 

[tanguy]

So I was able to generate the activity statement up to 05-04-2024, and there is indeed to convert back my 3.61 USD to CHF. I guess I accidentally clicked on the "Convert all to CHF" button on IB. Interestingly, there is no fee for this transaction. Does anybody know why?

 

[Baptiste Wicht]

So I was able to generate the activity statement up to 05-04-2024, and there is indeed to convert back my 3.61 USD to CHF. I guess I accidentally clicked on the "Convert all to CHF" button on IB. Interestingly, there is no fee for this transaction. Does anybody know why?

Normally, IB should not convert any currency automatically indeed. But if you did it manually, you should have paid a fee (2 USD).

I can think of two reasons why IB would trigger an automatic conversion:
* If you go into negative CHF but normally this is not possible with a cash account and would be fine with a margin account.
* If you did not have enough CHF to pay the fees on a CHF transaction. But normally, they should not let you trade in the first place.

That's really weird. You should pay attention to it the next time you invest to see if it happens again.

 

[BPH]

I am pretty certain that IB always converts small foreign currency amounts overnight back to the base currency. Somehow I think the limit was less 5.
There is no fee on such auto conversion, but I think a small mark-up on the FX rate of like 0.03% or similar.

I tried to find it in the terms and FAQs, but could not.

 

[Baptiste Wicht]

I did a little more research, and you are absolutely right!

IB will act to automatically convert non-Base Currency balances only where the balance is nominal (i.e., below USD 5 equivalent and assuming no subsequent trade activity through settlement) and when the customer requests to close the account (where the balances are below USD 1,000 equivalent)

Converting Currency Balances | Knowledge Base

ibkr.info

 

[tanguy]

Oh ok then it explains what happened.
Thanks a lot for this information!