Carlton Cold's

Just wondering whether there are strict rules which limit clients transferring back and forth between sterling and dollar. Given the markets are all over the place, we didnt know whether you could transfer your dollars back into sterling why the exchange rates are lower (2.35) and then if they jump back up-to the 2.50 mark transfer back to aussie dollar. I gather there are tax implications, but is this possible, as you could make a nice profit.

Thanks

Red_V_Roger

I guess thats what currency trading is all about...but I'm sure gains would be taxable.

MTPockets

Yep, but you need to check first as some won't hold your money (they only transfer at agreed rate to a beneficiary account). Not the end of the world as they all have a 3 business day transfer rule so you could just keep transferring, but there are others that will hold your money if you want to flip it.

Oh, and also double-check with your bank that they guarantee funds will hit the broker's account within 3 days. I was stuffed on this a month or so ago (anti-money laundering checks meant it took an extra day and I lost the rate) - the bank won't admit any fault which has cost about 10% and rising...

I'm not sure about the tax element. Good luck.

Carlton Cold's

thanks for the advice, I might give it ago. I just thought if I had $400k in dollars, which I transferred a few wks at 2.55 and then bounce it back to the uk at maybe $2.30, then when it reaches the 2.50 transfer back to the aussie dollar I might make a small profit to cover the endless costs we have incurred as we are in oz on a student visa and its costly a bomb with 2 young children..

Cheers again...

iamthecreaturefromuranus

always assuming that it does go back to 2.50 again. if it doesn't you could be knackered

MTPockets

Well you're up about 11% in sterling terms so you have a buffer if the rate goes up. A few tips if you're going to have a go - esp as this is the most volatile I've ever seen the markets.

1) Start with an amount you can afford to lose.
2) Choose a broker with 24hr trading - preferably online with a screen so you don't risk missing prices due to engaged phone/waiting for broker.
3) Make sure you price any spread/commission into your thinking.
4) Be very strict with yourself re. pre-considered in/out levels (it's psychologically much harder to cut a loss than take a profit - don't get caught by that mindset).
5) Make sure you know what economic data is due for release - and keep an eye on dollar and yen fx rates as they'll pretty much determine where gbp/aussie goes
6) Do not generally listen to your broker's opinion (or anybody on this forum for that matter) regarding where rates will go and when. Views are fine, but unless they're actually trading and privy to knowledge about large flows (rather than just picking up a phone and clicking a button) they generally know no more than you.
6) Always bear in mind you are already in Australia - you need dollars not pounds so profits in GBP terms don't mean anything unless you're either going back or don't need the money for a while.

Bon chance.

Wol

I've just thought of a wonderful new way of making money: buy low and sell high.

Easy!

Carlton Cold's

Excellent advice, really positive and honest and I know it must av its pitfalls but it may be worth a risk given how the rates are changing at the moment. Cheers again..
Russell Ward

Twinset

Hey, we could all club together and trade our currency together, and maybe, if we made some cash, start loaning it out to others, and pay ourselves a bonus when it goes well.


And, because we would only ever lend to people who were good to pay back the money, we would never need a £10bn loan ourselves............

MTPockets

Or how about you give me your money and I invest it in the Bank of Me. If I make money I keep most of the profits, and if I lose I keep the bonus I paid myself, you lose everything and the tax-payer bails me out. And even if you decide not to give me your money and keep it in my nice safe bank account instead I'll mess things up so much that I'll still have to cut your savings rate to a negative real rate after inflation to cover my losses. That sounds pretty fair yeah...?

Twinset

Ahh, come on.......I really don't think you are paying yourself enough for the risks that the Bank of Me is taking there:

I mean, what about the chances of slipping on the red carpet between the chauffeur-driven car and the office, or the occupational hazard of over-indulging in champagne and caviarre, or having to deal with the occasional poor person, like Iceland

I think it would be much fairer if you delegated some of your tasks: I hear Nick Leeson is wanting back into banking........as a role model

MTPockets

I know, I'm all give give give. Actually my new crocodile-skin loafers do have very slippery soles and all that rich food and drink could do real damage to my liver. I should definitely price in a bit more for myself to cover that. Poor people...uurrgghh...especially those from iceland with really cold hands...maybe you can deal with them for me - just tell them everything's going to be fine. If they don't believe you remind them who owns their house and ask them how much they value their jobs.

I'll try Leeson - he's quite hard to reach on his £1m a time speech circuit. Maybe I can get hold of that french dude from societe general. I mean if we're gonna do this we may as well do it with someone who bets big. See if you can find a couple of ex-enron accountants to help us get creative. Actually the natwest 3 are heading back to the uk - maybe I could use some of the cash (your cash obviously, not mine) to break them out of prison and get them in the team. Can't wait...