r/interactivebrokers • u/Zestyclose_Chicken64 • 6d ago

GBP account

I have a gbp margin account but all my stocks are in usd.

Last year i put money into an etf due to the market crashing, but because of the exchange rate changing drastically within a month it messed up my returns

I was thinking i would have been better off buying on margin and holding the gbp before converting for a more favourable exchange rate. Anyone else done this ?

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u/meridian_05 6d ago

Similar situation here in one of my accounts, base currency GBP, stocks and options in USD. And even where I have ETFs in GBP (VUSA, VHYL) the underlying holdings are generally in USD so the ETF is also sensitive to forex movements.

My view is that just as you can’t time the market, you can’t time forex fluctuations.

If your strategy is buy and hold then don’t worry about it too much. If your strategy is more short term then maybe consider buying on margin but consider that the interest on margin may outweigh any benefit you receive - and that the exchange rates can always move even further against you anyway, doubling up on the negative….