I want to convert a few US$100K to Euros. I don't want to "close" the trade, I simply want to convert US$ to Euros, then transfer those Euros out to either hold in a bank or purchase assets denominated in Euros.
If you wanted to do what I described above, how would you do it?
What financial intermediary or broker would you use?
Would you break your trades down into smaller chunks? If so, what size?
Since Banks offer crap conversion rates, it seems far better to make the exchange through a Forex marketplace, such as one of the various ECNs (IdealPro, HotspotFX, etc.)...
However, since any broker could potentially pull a Refco at any time (please correct me if I'm wrong here, but as I understand it Refco had billions, on the same order of magnitude as today's best capitalized Forex brokers), and since forex accounts are not covered by any insurance in the event of a broker's failure, there is cliff risk in holding money in a Forex account, even for a short period of time. That is why I would want to limit the amount of money that I hold in a forex account at any point in time by doing my exchange in multiple chunks rather than one lump sum.
If there was a way to get a good deal on the conversion (good price, low spread) through a more regulated, insured institution, then I would prefer that method over using largely unregulated uninsured forex brokers.
Finally: Any other related advice?
If you wanted to do what I described above, how would you do it?
What financial intermediary or broker would you use?
Would you break your trades down into smaller chunks? If so, what size?
Since Banks offer crap conversion rates, it seems far better to make the exchange through a Forex marketplace, such as one of the various ECNs (IdealPro, HotspotFX, etc.)...
However, since any broker could potentially pull a Refco at any time (please correct me if I'm wrong here, but as I understand it Refco had billions, on the same order of magnitude as today's best capitalized Forex brokers), and since forex accounts are not covered by any insurance in the event of a broker's failure, there is cliff risk in holding money in a Forex account, even for a short period of time. That is why I would want to limit the amount of money that I hold in a forex account at any point in time by doing my exchange in multiple chunks rather than one lump sum.
If there was a way to get a good deal on the conversion (good price, low spread) through a more regulated, insured institution, then I would prefer that method over using largely unregulated uninsured forex brokers.
Finally: Any other related advice?
