Help me understand Forex in Interactive Brokers

External question — Personal Finance Stack Exchange Author: ggambetta Original post: https://money.stackexchange.com/questions/24640 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I have a CHF-based account in Interactive Brokers. I wanted to buy VEUR in LSE, which trades in GBP. I entered an order, I was told I didn't have enough GBP. Fair enough. I asked the live chat how to do this, and I was told to do a Forex trade. So I bought some GBP with the CHF (let's say 1000 GBP), bought VEUR in GBP, and so I was left with some GBP in the account (let's say 10 GBP). In the Home/Positions tab I can see the VEUR, the CHF, and the leftover 10 GBP. So far so good. What I don't understand is when I go to Trade/Quicktrade, the Positions section shows an open position for the GBP ( GBP, Cash, IDEALPRO, CHF ) but for the original amount of 1000 GBP, not for the leftover 10. If I click the Close button, it creates an order to sell 1000 GBP, which I don't have! What's going on? I thought I was selling CHF, buying GBP, and then buying stock, as if I went to a (physical) exchange and bought some currency. This open position makes me thing something else may be going on (am I somehow borrowing currency from IB?). I'm really afraid of doing this wrong and ending up losing a lot of money or paying interest or whatever.

External answer — Personal Finance Stack Exchange Author: littleadv Original post: https://money.stackexchange.com/a/24650 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. You're confusing open positions and account balance. Your position in GBP is 1000, that's what you've bought. You then used some of it to buy something else, but to the broker you still have an open position of 1000 GBP. They will only close it when you give them the 1000GBP back. What you do with it until then is none of their business. Your account balance (available funds) in GBP is 10.