Multiple currency securities

English Transactions
1

I am quite sure this has been asked before in one form or another but it is still not quite clear to me.

Consider this situation. I have securities with broker-1. With them, i also have cash accounts in EUR and say USD. My “primary” (this is my denomination as in how, I deposit money to my broker) currency is EUR. If I want to buy stocks in USD, I convert from EUR account at the broker to the USD account and use the USD amount to buy stocks. The stocks are then displayed at the broker in USD.

In PP, i setup securities account in EUR (call sec_broker1_EUR) and a reference account in EUR (dep_broker1_EUR). But I am not sure how to setup the multicurrency system. I think that I need a deposit account in USD (say dep_broker1_USD) but I am not sure how to add USD securities. I can think of two options:

  1. This one I think i saw here or in help. Basically, the stock is purchased in USD but it is saved into the security account in EUR. This would however mean that it is reported and treated as if it was in EUR.

  2. I would need to create another security account in USD and connect it to USD deposit account. What bothers me here is that it looks like two separate accounts and I do not know if this is the correct way to go. Also, for example, if I want to see the total performance, would the assets in the USD securities account be converted to EUR?

Which one is the way to go?

1 Like
2

As securities in general, think about of a further option. The currency per security is associated with the historical quote prices. You setup cash accounts per each currency. You’re buy/sell from those cash account, matching your designated currency, buy/sell the securities regardless their currency and assign them to any deposit accounts you’ve.

3

I am not sure that I understand what you are saying.

4

Let’s give it a try with different words.

You do set up cash accounts with various currencies.

Let’s say:

  • One for USD
  • One for EUR
  • One for CAD

As well, you need securities (the one you like to buy) in the respective currency.

So you create these securities in the respective currency. For instance:

  • Amazon in USD
  • Canadian National Railroad in CAD
  • Daimler Truck in EUR

Now the purchase:

  • Amazon purchase comes from the USD cash account
  • Canadian National Railroad comes from the CAD cash account
  • Daimler comes from the EUR cash account.

You’ll find further information here:

→ Deposit

→ Purchase

→ Sell & Buy

Hope that helps!
Cheers

5

This is very helpful, thank you. Is there any way of adjusting the Flex Query import from IB to reflect the EUR, USD, GBP deposits? My IB account is in USD, I deposit in EUR or USD, then convert to EURUSD, EURGBP, EURCHF, EURSEK, but the IB Import doesn’t reflect the FX changes, it reflects the deposit on the day it was made as USD. I have no SEK, GBP or EUR balances showing in PP. Do I need to adjust that all by hand? Thanks for your insights!

1 Like