- Joined
- 13 September 2020
- Posts
- 15
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- 32
Hi All,
Not entirely sure where to put this one and I couldn't find a prior post from a quick search.
With CMC and now SelfWealth offering the option to invest in the US markets from AU I've been wondering if that would be a viable option to use for a coded strategy. I'm not sure about SW but with CMC my understanding is:
- Funds are held in an AUD bank account
- On purchase, AUD is converted to USD at current fx. there's a small buffer that's reserved and refunded to account for fx fluctuation.
- On sale, USD is converted back to AUD at current fx.
So on the buy and sell sides there's additional risk introduced in the form of the exchange rate fluctuations. If one was to use a coded strategy I see the options as either
1 - Keep the purchase qty as per the strategy and deal with the changing AUD cost of each buy - I can't see this being very feasible unless you had an additional AUD buffer in your account.
2 - Keep the AUD purchase size as the static item and based on current FX vary the purchase qty - This makes money management easier however change the qty from the strategy introduces another variable/risk.
Has anyone tried to test this at all? or is it just straight to IB or other broker and the risk isn't worth it?
Not entirely sure where to put this one and I couldn't find a prior post from a quick search.
With CMC and now SelfWealth offering the option to invest in the US markets from AU I've been wondering if that would be a viable option to use for a coded strategy. I'm not sure about SW but with CMC my understanding is:
- Funds are held in an AUD bank account
- On purchase, AUD is converted to USD at current fx. there's a small buffer that's reserved and refunded to account for fx fluctuation.
- On sale, USD is converted back to AUD at current fx.
So on the buy and sell sides there's additional risk introduced in the form of the exchange rate fluctuations. If one was to use a coded strategy I see the options as either
1 - Keep the purchase qty as per the strategy and deal with the changing AUD cost of each buy - I can't see this being very feasible unless you had an additional AUD buffer in your account.
2 - Keep the AUD purchase size as the static item and based on current FX vary the purchase qty - This makes money management easier however change the qty from the strategy introduces another variable/risk.
Has anyone tried to test this at all? or is it just straight to IB or other broker and the risk isn't worth it?
