Questions for IB Canada users

[Teruki 21]

Hi,
I just opened up an IB Canada account. I was about to deposit my funds but I read in this thread that if you deposit CAD to your account you have to borrow USD every time you trade and the exchange fees are very expensive. The only way to go about this is to deposit USD directly, which is doable but a bit bothersome (I would have to open an USD account). I thought I could fund in CAD and convert everything into USD at once within IB but can I not do so? What do you do? Do you keep CAD and put up with the high exchange rate or did you deposit USD directly? Possibly the information on the thread is not correct and you can just exchange everything from CAD to USD at once in the account? 

I have opened a ticket in my IB account asking this but this being the weekend and they don't seem to be known for great customer service, I decided to ask this here too. Also regardless of their answer(s), I would like to hear from you (users) directly what you do. 

Thank you.
 

Edited September 27, 2020 by Teruki

[Brett T 0]

Bumping this thread as I have the same question

[Teruki 21]

12 hours ago, Brett T said:

Bumping this thread as I have the same question

Hi,
Sorry I should have followed up on this thread too.
(I think) I figured it out and replied  on the other thread about it that is linked in my OP.

Essentially, we borrow USD every time we trade if we don't have enough USD in our account, but the exchange rate has nothing to do with it (At least it is the explanation I got from the IB chat support).
Let's say you borrow $100US to buy a stock, and if you win the trade and get $110, then now you have $10US in your account. We borrow $100 in USD, you give back $100 to IB in USD, and have $10 extra.
If you lose and sold the stock at $90, now you have negative -$10 USD in your account. There will be interest for this (negative amount - the same as credit or line of credit etc.). You could convert the negative amount of  USD from your CAD easily. You could also convert entire CAD to USD but it is not really necessary and actually this would be more risky because of the exchange rate if your base is Canada and your goal is to have more CAD in the end.

What seemed to have been an issue with the other thread is that your asset in USD (and it shows in USD in your statements if your base currency is USD) fluctuates depending on the exchange rate. Let's say you have $1,000 CAD in your account and it is about $750USD. If the CAD drops a lot against USD then it might become $730USD by the end of the day. In this case, even if you make $10USD, your statement in USD will be less than where you started (drops from $750 to $740USD). But what you have in CAD would actually be growing ($1,000 CAD plus $10USD equivalent in this case).

At least this is my understanding.
Anyone please correct me if I am wrong.