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Chris
@Multibagger
1Sem.·

Why I opened a USD account!

I have often traded positions directly in the USA. Now I have also set up a USD account with Flatex.

In the comparison below as an example for $ROKU (+1,13 %) you can see the difference in performance very clearly. On the left on a € basis and on the right on a $ basis. That's about 5% less return in € over the short term.

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37 Commentaires
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Moritz@MoKi28
1Sem.
But what's the point? Is it only due to the exchange rate anyway?
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Chris@Multibagger
1Sem.
@MoKi28 more return and I can decide if and when I exchange the $ back into €:. This means I have no currency risk. I am currently exchanging € for $ and get a relatively large amount of $ to trade. I use this to buy shares in the USA. Once my profit target is reached, I can sell them and the money ends up in USD in my USD account. However, this only works if the trading costs in the USA are not too high. I pay €5.90, which I think is reasonable.
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Moritz@MoKi28
1Sem.
@Multibagger The yield remains the same, you just have to adjust the exchange rate. This makes absolutely no difference in the end. You can also simply switch the view to USD, then you also have "more return" 😃
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Moritz@MoKi28
1Sem.
@Multibagger You may have "more" money to trade, but the shares cost more in USD than in euros, so it doesn't help you at all, except probably a few additional costs.
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Chris@Multibagger
1Sem.
@MoKi28 I don't think you understand. What you describe is perhaps true for someone who buys and holds. But if you trade a lot like I do, it's noticeable.
To make it simpler. You buy a share at parity 1:1 at 100 € or I for 100$. 6 months later, the share is at 110$, the exchange rate is 1.10 and you sell. You get €100 credited again, I get $110. What use is the conversion to USD display to you now? There is only 100€ in your account that you can reinvest. So it's a zero-sum game.
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wealth_maximizer_ebllj@wealth_maximizer_ebllj
1Sem.
@Multibagger aren't you indirectly betting on a devaluation of the euro against the dollar? Because otherwise the 110 USD won't do you any good if you end up withdrawing the money in euros at some point...
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Chris@Multibagger
1Sem.
@wealth_maximizer_ebllj That's right, but I can decide when to do it. As I currently assume that the € will continue to appreciate, I only exchange as much as I need to trade. As this can be done within minutes at Flatex, it's not a problem. I am not currently planning to exchange the $ back in this custody account, as it is a separate custody account only for US shares with a USD account.
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Moritz@MoKi28
1Sem.
@Multibagger But couldn't you just transfer money from an account in euros to an account in USD? Why the detour via shares?
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Das Portfoliopferd@Portfoliopferd
1Sem.
@Multibagger Your currency risk does not disappear, it just shifts into the future. The only thing you gain is some flexibility. More return is a fallacy, at best only if the costs are lower.
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LoneMelone@TradingMelone
1Sem.
@Multibagger Brave to bet against the dollar at the dollar levels🤷
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Chris@Multibagger
1Sem.
@TradingMelone What is courageous about that? It's my assessment. I have already explained this in the last few days. There will be a yield curve control in the US next year at the latest, at the latest when the new Fed chief is in place. Government debt will rise to 120-130% of GDP in the next few years. I see 1.25-.130 rather than 1.10 in the exchange rate.
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Voir toutes les 8 autres réponses
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Ella M.@DividendenWaschbaer
1Sem.
How do you deal with currency gains and tax? Very few brokers can/will not report this. This means that you would have to report all profits to the tax office.
That seems extremely complex to me.
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Chris@Multibagger
1Sem.
@DividendenWaschbaer the currency gains would only accrue when I exchange the $ back and the exchange rate has changed in my favor by then. In other words, the € has lost against the $. As long as I hold my shares and account in $, I have no currency gains.
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Dividendenopi👴@Dividendenopi
1Sem.
@DividendenWaschbaer There are new tax bases for currency gains as of 01.01.2025. As these will then also be subject to the KAP tax deduction of 25% plus solidarity surcharge, it is now up to the banks to carry out the tax settlement. All relevant transactions that are affected by the tax changeover should be identified first. Potentially, these are all transactions that can be bought and sold in foreign currency and can generate corresponding profits and losses. These must then also be identifiable in the system in future. As this will probably lead to significant additional work for the banks, I do not believe that this will be free of charge for the account holder.
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Maverick@Pete_Mitchell
1Sem.
@Dividendenopi As far as I know, the banks do not do this, but the investor has to declare it. This will lead to a lot of work and trouble. Incidentally, currency gains have always had to be taxed. The tax authorities have only said that they will check this from 2025 if there are currency accounts.
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QUANTIJS@QUANTIJS
1Sem.
Isnt flatex expensive for US stocks? Atleast degiro is in NL. I use IBKR for much lower rates and you also have accounts for USD and EUR (with much lower FX costs).
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Chris@Multibagger
1Sem.
@QUANTIJS what is expensive for you. I pay €5.90 per trade. That's very cheap for trading in the USA with all the brokers I know in Germany
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QUANTIJS@QUANTIJS
1Sem.
@Multibagger I dont know your trade volume for FX, but commissions are $0.35 per trade and I paid 2 euro FX for 2k stock, while at degiro this would be 10 euro or higher.
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Chris@Multibagger
1Sem.
@QUANTIJS with my order volume, rather under 500,--€ per trade it is 5,90€. I don't know what the situation is at IBKR with small orders.
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QUANTIJS@QUANTIJS
1Sem.
@Multibagger I guess its a percentage. I have trades of 1k with around 1 euro FX. Trades of 230 euro with 0.23 euro FX. You can also buy fractional shares (and DRIP dividend). For me, even buying ETFs from DE market is cheaper from IBKR (around 1.25 euro vs 3 euro on degiro) and NL stocks also 1.25, which is only slightly more expensive than their 'core-selection'. I also don't have 'connection' fees.
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Chris@Multibagger
1Sem.
@QUANTIJS When you say there are also fractional shares, do share savings plans also work?
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QUANTIJS@QUANTIJS
1Sem.
@Multibagger I think so, but Ive not yet used it. I think they are subject to normal fees (not free like some brokers). I've only used fractional shares for DRIP of US stocks so far, but they are available for more. See csv list here https://www.ibkrguides.com/kb/en-us/fractional-share-trading.htm
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❤️DIST-LOVE@DISTLOVE
1Sem.
What's the point? It makes absolutely no difference to exchange rate fluctuations.
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Chris@Multibagger
1Sem.
@DISTLOVE I have already explained it in other answers.
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GeldGenie@GeldGenie
1Sem.
Swissquote offers x currencies, free of charge and automatically.

However, I usually receive my income in CHF - when I invest I "have" to buy FW anyway. In the end, it's only "useful" for switching. USD share A into USD share B.

It's certainly not a bad decision. 👍
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Matzke@Matzke
1Sem.
I think your "performance difference" is solely due to the depreciation of the US dollar against the euro. Incidentally, I think this is a trend that every investor should now be keeping an eye on.
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Chris@Multibagger
1Sem.
@Matzke it is not only. In the period under review, the difference was 1 ct. Performance 5%
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DiviMike@DiviMike
1Sem.
I would appreciate an invitation link to Flatex. We'd both benefit from it 😉
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Chris@Multibagger
1Sem.
Many thanks to everyone for the lively exchange. Finally, I would like to make one more point. Many of your arguments assume that the conversion of the $ rate to the € rate always corresponds exactly to the exchange rate. However, this is by no means the case and can be clearly seen from the chart. Between buying and selling the share, the € rate rose by exactly 1 ct from 1.162 to 1.172. That is not even 1%. That is not even 1%. But the difference in price gain is 5.5% between the share in € and the share in $.
This shows that some of you are mathematically correct in your reasoning, but not in your trading.
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