Taking cross currency position with different balance currency
Taking cross currency position with different balance currency
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codekiddy · External communityPost link
External question — Personal Finance Stack Exchange
Author: codekiddy
Original post: https://money.stackexchange.com/questions/41618
License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/
Adaptation: HTML converted to plain text; contact email addresses removed.
For example I have 10'000 € account balance in my forex trader platform.
I want to buy dollars vs. yen. that is USD/JPY pair.
according to some logic in order to buy dollars (USD/JPY) I need yen right? so upon taking long position to buy USD/JPY my account balance which is in euros will be charged to buy yen first then those yens will be used to buy dollars? Is that correct?
OR, is my Euro acc. balance charged directly to buy dollars without purchasing yen first?
which one of these two statements is true and why the other statement is false if so?
EDIT:
also the same case as above, let say I want to buy yen against the dollar instead (vice-versa), then I suppose procedure will be to (automatically)buy dollars first and then buy yen in order for position to be open, right?
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Quoted from Forex.com.bd-Editorial External question — Personal Finance Stack Exchange Author: codekiddy Source score (net votes, not local likes): 1 Original post: https://money.stackexchange.com/questions/41618 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. For example I have 10'000 € account balance in my forex trader platform. I want to buy dollars vs. yen. that is USD/JPY pair. according to some logic in order to buy dollars (USD/JPY) I need yen right? so upon taking long position to buy USD/JPY my account balance which is in euros will be charged to buy yen first then those yens will be used to buy dollars? Is that correct? OR, is my Euro acc. balance charged directly to buy dollars without purchasing yen first? which one of these two statements is true and why the other statement is false if so? EDIT: also the same case as above, let say I want to buy yen against the dollar instead (vice-versa), then I suppose procedure will be to (automatically)buy dollars first and then buy yen in order for position to be open, right?
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