Hello, I will describe the situation as it is now and how I would suggest it be.
The whole example will be if you have a different main currency in your account and you are trading stocks in a different currency. E.g. pounds and the dollar.
This applies to investments, but it can also be in CFDs.
Current behavior:
I can transfer free funds to another currency and keep them there.
If I buy or sell shares of a company with another currency, an FX transfer and a fee are always made.
Proposal:
If I sell shares in dollars, there will be no FX transfer, but the money will be stored as free funds in a specific currency.
If I buy stocks in dollars and I have some free funds in dollars, they will be taken. If I want to buy more shares than I have free funds in dollars, then a part is transferred from the main account in my currency.
I will do the conversion from dollars back to my currency myself according to the current exchange rate.
Goal:
The goal is to not have to pay an FX transfer fee even for daily/weekly investments. And at the same time the possibility to take free funds from the account in the same currency without FX fee.
This was a bugbear of mine as well, but then I found this option in Settings - Currency options. Please mind this might only apply to certain accounts. Iāve got it in my UK Invest account, but not in my Stocks ISA as HMRC does not allow to hold a foreign currency.
I have this option there. And will it behave in such a way that if I sell shares in dollars, the money will simply be transferred to my account in dollars without transferring the primary currency?
The second question is, if I buy shares in dollars and I have money in the account with dollars, then if they will be taken from it as a priority. And if they are not enough, then the rest is taken from the primary account with FX transfer?
Yes this works but not if your shares are in a pie (that come out of the home currency no matter what country company/share are bases in), you would need to take them out and put them back in again. This obviously then is not taking advantage of the pie balancing etc, but I am still not convinced the pie is a better alternative? I have been trying to get my head around how this works also and what the proās and cons are.
I havenāt tried it yet and just want to make sure. Just write yes/no or possibly a note if Iām wrong.
A basic example.
I have ā¬1000 in free funds on my main account.
Then I have another $200 as additional free funds just transferred.
BUY - If I specify in the settings that the purchase will be in the companyās currency (for example, dollars) and I buy shares for $100. So I wonāt pay any FX because they will automatically be taken from free funds in the US? If I donāt have any free US funds, will they be taken from ā¬ and will the FX be paid?
BUY - If I do the same with the $500 stock, I understand correctly that it takes $200 from the US funds without FX and the rest from the ā¬ account and adds an FX fee for the rest?
SELL - If I specify the sale in the company currency instead of the main account currency in the settings. I will sell shares for $100. So will these funds just be moved to US free funds with no FX fee?
SELL - Same as (3). But in this case the FX shown in the P/L doesnāt concern me, does it? Because I have to make the transfer myself to the currency of the main account.
Iām a bit late to the discussion this time but I will gladly provide you with an answer for each scenario in your last message
If you buy shares for $100 - yes, there will be no FX fee charged as the amount will be deducted from the USD balance that you have available as free funds ($200 as per your example). If you donāt have any USD in your free funds, the system will not allow you to place an order in USD, and youāll have to manually convert within the app from your ā¬1,000 to $200, or you can change the currency of the purchase to EUR from the order tab once you press āBuyā, and the system will make the conversion automatically with the usual 0.15% FX charge.
No, thatās incorrect. For the time being, you can select one currency per order. In this example, if you want to purchase $500 of shares but have only $200 available as free funds, the system will not allow you to place an order. The two suggestions from my reply to your first question also apply here.
Thatās right. The sale will happen in the instrumentās currency and the cash will be added in the same currency to your free funds. There will also be no FX fee charged.
Yes, the FX Impact will remain visible regardless of the currency in which youāve opened a position, but if you bought and sold both in USD, the FX Impact wonāt affect you as the conversion from USD to EUR never happens, unless you decide to manually convert the funds at a later stage.
I hope the answers clarify the multi-currency feature. Let me know here or in a DM if you still have any questions and Iāll be glad to assist. We also have a detailed Help Centre article on the topic, including screenshots and an FAQ. You can check it out on this page
I would have a few suggestions for improvement, but thatās not relevant to this topic.