Margins in Foreign Markets

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TK
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Margins in Foreign Markets

Post by TK » Fri Feb 24, 2006 7:03 pm

Tim or TBB users,

How does TBB handle margins for positions held in foreign markets?

(1) It assumes that the equivalent amount in USD is actually converted into a local currency when the position is opened and then converted back into USD when the position is closed.

OR

(2) It puts up the equivalent amount in USD for margin but without actually converting it into a local currency.

In other words, which of the two scenarios described in Question #4 in this post would be adopted by TBB? And how do brokers usually handle this issue in real life?

sluggo
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Post by sluggo » Fri Feb 24, 2006 7:28 pm


Forum Mgmnt
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Post by Forum Mgmnt » Sat Feb 25, 2006 8:38 am

TBB assumes that the USD are converted to the futures' base currency when entering and then converted back upon exiting the position.

As pointed out in the other thread, this number can be different because of currency conversion losses or gains.

- Forum Mgmnt

TK
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Post by TK » Sat Feb 25, 2006 8:46 am

Thank you, sluggo and c.f..

mike168
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Post by mike168 » Sat Feb 25, 2006 9:54 pm

c.f.

Will TBB convert back to USD during contract rolls?

What about exiting some of the contracts during partial exits / position reduction? Will the proceeds be converted back to USD in this case?

Thanks.

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Post by Forum Mgmnt » Sun Feb 26, 2006 9:34 am

Any exit, including contract rolls, partial exits, etc. converts back to $USD.

Even the open equity calculations at the close of each day account for the conversion back to $USD.

-c.f.

mike168
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Post by mike168 » Mon Feb 27, 2006 2:23 am

Thanks c.f..

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