Over on another board a few weeks ago there was a discussion on forex margin rates at IB and the guys there were saying that forex margin is doubled if neither currency of the pair you are trading is your account base currency.
I.e. it becomes 4% margin instead of 2% margin.
Were they correct about this ? If so it makes no sense as the position risk is not doubled - it is only increased slightly in that one's base currency might depreciate slightly against the $ (when trading the majors againt the $). One is not opening "two positions" as was said on that other board.
This would appear to be a big disadvantage to UK customers who might want to have a £ base currency in their account but to trade the EURUSD, USDJPY, USDCHF etc. pairs.
I.e. it becomes 4% margin instead of 2% margin.
Were they correct about this ? If so it makes no sense as the position risk is not doubled - it is only increased slightly in that one's base currency might depreciate slightly against the $ (when trading the majors againt the $). One is not opening "two positions" as was said on that other board.
This would appear to be a big disadvantage to UK customers who might want to have a £ base currency in their account but to trade the EURUSD, USDJPY, USDCHF etc. pairs.