[DugDug]

(Its rare I get to correct Blowfish as he is such a good source of knowledge...)

But you can actually enter trades into IB without a market subscription.
They will give you a few warnings saying they advise against it, but it definitely possible.
I have done it a few times with some stocks listed on the ASX in Australia and also some futures and stocks in the USA.
WARNING: I would strongly suggest you have it as a limit order, already know roughly where the prices are trading, and be very very careful, as you dont want a typo....even with a limit order.
Re: the inactivity and IB, I think it is $30pm if you dont pay a minimum brokerage ($10pm) for use of the platform....so even if you dont subscribe to an exchange. Funny thing is if this is the case its cheaper to buy and sell a few times a month, even if you break even.

[sevensa]

Originally Posted by DugDug »

Re: the inactivity and IB, I think it is $30pm if you dont pay a minimum brokerage ($10pm) for use of the platform....so even if you dont subscribe to an exchange. Funny thing is if this is the case its cheaper to buy and sell a few times a month, even if you break even.

Actually it is neither. They have two fees.

1. $10 a month for their standard subscription bundle market data iff you don't generate $30 in commissions a month.
2. Up to $10 a month for inactivity fee. You pay the difference between the $10 and the comissions you generated.

So, if you generate $5 commissions a month, you pay $10 data fee plus 5$ inactivity fee.
If you generate $10 commissions a month, you pay $10 data fee and $0 incativity fee.
If you generate $30 commissions a month, you don't pay anything.

It is all on their website. Click on Activity tab....

[BlowFish]

Originally Posted by DugDug »

(Its rare I get to correct Blowfish as he is such a good source of knowledge...)

Hehe thank you (I think) I did say I wasn't sure, it was kind of an educated guess Anyway another thing to file away until senility sets in! It's actually a very sensible decision on IB's part when you think about it as it makes things attractive to precisely this type of investor.

Mind you I am not sure the minimum account requirements and the fee structure for stocks, but if I was to stick my neck out again I would guess that they would tick those boxes.

[thalestrader]

Originally Posted by shortbleu »

2) The account can be funded in British pound (GBP) and only the profit/losses would be exposed to the risk of currency.

If you are buying US listed securities, then wouldn't the entire principle be exposed to currency risk?

Best Wishes,

Thales

[DugDug]

"US listed securities, then wouldn't the entire principle be exposed to currency risk?"

This is an interesting one as a lot depends on how you get the financing /margining from the broker.
Without going into too much detail.
example; base currency GBP. Buying stocks in USD
scenario 1) you are required to fund the whole amount in USD, hence the FX exposure is to the amount required to buy the stocks.
scenario 2) the broker loans you the money on margin, hence the FX exposure is to the amount of the margin + any PL on the trade. (This is how IB basically deals with it - you then get charged interest on the borrowed amounts of the margin amount, and its the PL and this margin that is expsoed to the FX risk - not the whole amount)
scenario 3) everything gets translated back and quoted in the GBP base currency with no FX exposure. (this can be more costly depending on how many transactions etc and is generally up to the investor to hedge the exposure out if the broker does not do it automatically - however the PL as it moves will produce a FX exposure as the prices move.)

Every broker may do it slightly differently and it is definitely up to each investor to work it out themselves. When looking at this accounting remember to keep in mind there is a difference between the actual positions held at a broker and the cash balances.
ie; you can have cash balances in different currencies - and hence FX exposures whilst having no positions.
From what I have seen from most brokers who over cross border services, generally its only the margin and PL amounts that are exposed to FX as this is reflected in the cash balances shown in USD, EUR, AUD etc;.

I hope this helps and does not confuse.

Hi Blowfish - yes it was a complement.