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Buying currency abroad

  • #1
  • First Post: Apr 29, 2006 10:24am Apr 29, 2006 10:24am
Hi all,

I have good idea to start business in my country.
I am from Georgia, its national currency is Lari - GEL,
Spread in EURGEL is on an average 200 pips!!!! yeah
Also it is prohibited to make operations in EURUSD directly. Transaction should take place through GEL, thus for EURUSD spread widens and is over 250 pips !!!!

I know what one commercial bank is doing.
When there is big client requiring EURs vs GEL, bank is buying EUR vs USD in interbank market from Commerzbank mainly where spread is 3-5 pips. Here in Georgia bank is buying dollars vs GEL paying over 25 pips, so with over 30 pips bank buys EURs vs GEL and client pays over 150 pips (VIP clients).

SO I thought I could do so too, It could be good business,

So my question is what is spread in EURUSD in your countries? If I open account abroad and make operations like that. Also are there any special brokers which allow operations like that. I mean can I buy EURs vs USD and withdraw it.

Idea is good, I can invest good deal of money, I need just find out what can I do.

So any feedback would be appreciated
kiss the trend
  • #2
  • Apr 29, 2006 11:26am Apr 29, 2006 11:26am
fx-trader777

I guess, in your country any legal business dealing with currency exchange must operate under some banking regulations.
I have feeling that banks wouldn't take 200 pips spread if the market of currency exchange was open for competition.
I think this is the first thing you need to find out. And if such business can be legal, you should ask yourself why nobody is doing what you want to do. I guess, in Georgia, buying and selling currency is not something nobody thought about before you.
  • #3
  • Apr 29, 2006 12:13pm Apr 29, 2006 12:13pm
Quoting FxFox
fx-trader777

I guess, in your country any legal business dealing with currency exchange must operate under some banking regulations.
I have feeling that banks wouldn't take 200 pips spread if the market of currency exchange was open for competition.
I think this is the first thing you need to find out. And if such business can be legal, you should ask yourself why nobody is doing what you want to do. I guess, in Georgia, buying and selling currency is not something nobody thought about before you.

no for my country it's OK I have arranged everything and planned, The only thing I want to do is to find out if I can buy currency abroad and withdraw it, or is there any broker which specializes on this kind of operations.

The spread is big especially in EURGEL and GBPGEL (there is not any demand for other currencies), becasue of low level of liquidity, but now liqudity and demand for EUR have rosen and spreads remain unchanged as there is difficulty in cash market to get EURs, banks accordingly do not reduce spread or reduce for VIP clients, because there are only 2-3 banks which have access in interbank forex market to buy EURs with 3-4 pips spread, so it is like oligopoly and banks gain good cash. SO cash market is in confusion and I can offer as low as 100 pips in EURGEL, EURUSD (lol ). I have potential clients, small enterprises, individuals.

So if you help me find appropriate broker to cooperate with, I will be grateful

thanks in advance
kiss the trend
  • #4
  • Apr 29, 2006 1:04pm Apr 29, 2006 1:04pm
The majority of countries in the world do not allow their local bank /citizens to have account in foreign currencies. That would be the first problem.

When a bank is charging 100 pips, it is normal if you are talking about cash. In devise form it is after USD50'000.00 that banks would give you a better rate. Don't expect much. the next better offer is 250'000. It is only above 5 millions that you can start negotiating with your banks. Forget about the 2-3 pips ! !
No banks will work for that.

You will always have to give away your initial commision to change your currency to EUR-AUD-GBP-YEN-CHF etc.: unless you find a broker who can denominate your trading account in your country's currency. Difficult ! ! If you know your banker well, the most you can do is to have them on line and you on your charts. When there is a strong move in your currency, try to cover the banks's commission with your winning move.

Once you have your account in USD etc. most brokers will be willing to transfer the money back to you the currency you would like to have according to the spread of that pair. Just a phone call to your broker and fix the price to the minute. Your conversation will be registered and you normally will need to reconfirm by FAX ( sometimes e-mail might be enough). In case of dispute, some countries oblige you to do it by FAX reconfirmation.

If they send it in Euro back to your country, I doubt your bank can give it to you in EURO. It is devise. To get it in cash, your local bank will charge you a big commision. ! !

If not many people are in this exchange business in your country, there must
be some obstacle involved.

Good luck
  • #5
  • Apr 29, 2006 2:49pm Apr 29, 2006 2:49pm
Quoting highway3000
The majority of countries in the world do not allow their local bank /citizens to have account in foreign currencies. That would be the first problem.
I do have a multi currency account with a local branch of a multi-national bank here in Egypt, it's no problem at all to have a local account which contains EGP, USD, EUR, GBP or any other foreign currency....Wire transfers in & out are also available, with the normal fees of course...


Thanks,

Nader
  • #6
  • Apr 29, 2006 3:27pm Apr 29, 2006 3:27pm
Quoting highway3000
The majority of countries in the world do not allow their local bank /citizens to have account in foreign currencies. That would be the first problem.

When a bank is charging 100 pips, it is normal if you are talking about cash. In devise form it is after USD50'000.00 that banks would give you a better rate. Don't expect much. the next better offer is 250'000. It is only above 5 millions that you can start negotiating with your banks. Forget about the 2-3 pips ! !
No banks will work for that.

You will always have to give away your initial commision to change your currency to EUR-AUD-GBP-YEN-CHF etc.: unless you find a broker who can denominate your trading account in your country's currency. Difficult ! ! If you know your banker well, the most you can do is to have them on line and you on your charts. When there is a strong move in your currency, try to cover the banks's commission with your winning move.

Once you have your account in USD etc. most brokers will be willing to transfer the money back to you the currency you would like to have according to the spread of that pair. Just a phone call to your broker and fix the price to the minute. Your conversation will be registered and you normally will need to reconfirm by FAX ( sometimes e-mail might be enough). In case of dispute, some countries oblige you to do it by FAX reconfirmation.

If they send it in Euro back to your country, I doubt your bank can give it to you in EURO. It is devise. To get it in cash, your local bank will charge you a big commision. ! !

If not many people are in this exchange business in your country, there must
be some obstacle involved.

Good luck
thanks for feedback
Wait a minute! You are saying that there is broker which allows me to withdraw money in EURs as well if my account is denominated in USD.
To get cash no problem. There is 0.3% on withdrawal and I can get EURs easily. Here does not exist any restriction or regulation in currency operations, the spread is in EUR pairs big because the exchange operations are mostly held in cash market withought banks, also banks do not reduce spread becasue there are 2-3 major banks which create oligopoly in forex. So if I would be able to buy currency abroad with let's say 25 pips I could offer quite competitive spread say 70-100 pips. I know that GEL is not convertible currency and I do not need that, I will buy USD here by gel cheaply with 25 pips spread and I buy EURs abroad cheaply too, this means I bought EUR vs GEL. So here I will have EUR holdings to meet clients needs immediately and later when there occurs lack of liqudity in any pair I will withdraw from abroad. I have made a plan how to control open position and how to diversify. I just need a BROKER with which I can buy EUR (Just EUR not any other) at low spread.
SO you mentioned you know broker who allows this. So what is that broker?

thanks
kiss the trend
  • #7
  • Apr 29, 2006 3:30pm Apr 29, 2006 3:30pm
multi currency account also no problem, I can have how mush I like for free, there does not exist account maintenance fee or anything. Just withdrawal costs 0.3% it is lowest rate in the bank where I worked
kiss the trend
  • #8
  • Apr 30, 2006 1:24pm Apr 30, 2006 1:24pm
I think there are a lot of brokers that will do that. If you want a broker in Switzerland, try realtimeforex or MIG. I had an account with Realtime started in Swiss francs. I drew out money in USD. I called Mr Schirru and we watched the chart together and locked on to the rate we agreed together. The money was then sent back to my account but in USD.

I did the same with RCG trader in Chicago. We agreed that when the USD/CHR touched, the 1.2800 level, convert the USD I had with them and change it into Swiss francs. Then send it back to Switzerland.

The tricky thing is your country. I think.
Highway
  • #9
  • Apr 30, 2006 2:19pm Apr 30, 2006 2:19pm
Quoting highway3000
I think there are a lot of brokers that will do that. If you want a broker in Switzerland, try realtimeforex or MIG. I had an account with Realtime started in Swiss francs. I drew out money in USD. I called Mr Schirru and we watched the chart together and locked on to the rate we agreed together. The money was then sent back to my account but in USD.

I did the same with RCG trader in Chicago. We agreed that when the USD/CHR touched, the 1.2800 level, convert the USD I had with them and change it into Swiss francs. Then send it back to Switzerland.

The tricky thing is your country. I think.
Highway
That's great, and so spread is standard? I mean what you use during trading.
Why my country is tricky? I will transfer them funds in USD then I will withdraw in EUR the account number is the same for foreign currency accounts in Georgian banks. And there is no any limitations on withdrawals. It is much more liberal than any other country's exchange regime. IMF ratet georgia's currency regime as one of the most liberal regimes in the world.

For example I will transfer 300 000 USD and I can withdraw 50 000 EUR converted
kiss the trend
  • #10
  • Apr 30, 2006 2:34pm Apr 30, 2006 2:34pm
At Oanda you can have 2 subaccounts, one in euros, one in USD. You can transfer funds between them at the spot price, with a spread usually 1.5 pips.
You can withdraw money from the account you funded. If you first transfer money in both accounts, I think you can withdraw from any of them.
  • #11
  • Apr 30, 2006 2:40pm Apr 30, 2006 2:40pm
Quoting cristian
At Oanda you can have 2 subaccounts, one in euros, one in USD. You can transfer funds between them at the spot price, with a spread usually 1.5 pips.
You can withdraw money from the account you funded. If you first transfer money in both accounts, I think you can withdraw from any of them.
what do you mean?

If I opened one account in USD with 150 000 USD
and second in EUR with 120 000 EUR

I will transfer 50 000 USD to EUR account with spot rate and withdraw now 165 000 EUR (or what it will be)?

Also one important question is how fast can I fix rate, i mean how fast I can do this operation. Can I do with just one click? or should I send special form and the operation would be processed in 2 business days????
kiss the trend
  • #12
  • Apr 30, 2006 2:51pm Apr 30, 2006 2:51pm
Quoting fx-trader777
That's great, and so spread is standard? I mean what you use during trading.
Why my country is tricky? I will transfer them funds in USD then I will withdraw in EUR the account number is the same for foreign currency accounts in Georgian banks. And there is no any limitations on withdrawals. It is much more liberal than any other country's exchange regime. IMF ratet georgia's currency regime as one of the most liberal regimes in the world.

For example I will transfer 300 000 USD and I can withdraw 50 000 EUR converted
Just one precaution. Money laundering ! ! In western Europe and North America, laws has become quite strict. If you are connected to money laundering, don't try ! ! If you are not it would be wise to have more than one account. Hedge one against another. Brokers won't do you the service to just receive your money and send it out back in a short while from the same account. They are under pressure to observe very strict laws.
  • #13
  • Apr 30, 2006 3:07pm Apr 30, 2006 3:07pm
Quoting highway3000
Just one precaution. Money laundering ! ! In western Europe and North America, laws has become quite strict. If you are connected to money laundering, don't try ! ! If you are not it would be wise to have more than one account. Hedge one against another. Brokers won't do you the service to just receive your money and send it out back in a short while from the same account. They are under pressure to observe very strict laws.
No, it is legal money
Here are strict rules too. If I transfer more than 15 000 USD the transcation info is sent to financial monitoring service.
kiss the trend
  • #14
  • Apr 30, 2006 3:11pm Apr 30, 2006 3:11pm
thanks


..................................
kiss the trend
  • #15
  • Apr 30, 2006 8:14pm Apr 30, 2006 8:14pm
Quoting fx-trader777
what do you mean?

If I opened one account in USD with 150 000 USD
and second in EUR with 120 000 EUR

I will transfer 50 000 USD to EUR account with spot rate and withdraw now 165 000 EUR (or what it will be)?

Also one important question is how fast can I fix rate, i mean how fast I can do this operation. Can I do with just one click? or should I send special form and the operation would be processed in 2 business days????
Not 2 separate accounts. One account and one subaccount.
You can make the transfer with one click.
  • #16
  • May 1, 2006 1:17am May 1, 2006 1:17am
OK I think I will choose oanda, I chatted with saxobank and there is 0.5% coversion comission to withdraw in EURs
kiss the trend
  • #17
  • May 1, 2006 6:49am May 1, 2006 6:49am
Quoting cristian
Not 2 separate accounts. One account and one subaccount.
You can make the transfer with one click.

Does transfer cost pips?? or it is free and is transfer done in spot rate?

I was told by saxobank rep. that transfer costs 0.5%.

Also how much oanda charges withdrawals?

Saxobank withdrawals are free of charge
kiss the trend
  • #18
  • May 2, 2006 8:33am May 2, 2006 8:33am
Quoting fx-trader777
Does transfer cost pips?? or it is free and is transfer done in spot rate?

I was told by saxobank rep. that transfer costs 0.5%.

Also how much oanda charges withdrawals?

Saxobank withdrawals are free of charge
The only thing you have to pay for transfers is the spread. About the withdrawal fees, I don't remember, only that once in a month you can withdraw free, using paypal (usd only).
  • #19
  • Last Post: May 2, 2006 8:49am May 2, 2006 8:49am
I just went and asked Oanda about charges and this is what they showed me...




Processing Time

Withdrawal requests will be processed by OANDA within 3 business days of receipt by OANDA.

Withdrawal Fee

Wire: The following bank wire fee schedule applies to withdrawals made by wire.

Bank Wire FeeAccountFirst Withdrawal (Fee)
processed within calendar month

Additional Withdrawals
processed within calendar month

EURO€40

Fee + €15

USDUS wire $25
International wire $40

Fee + $15

CADCAD $55

Fee + CAD $20

CHFSwf $50

Fee + Swf 20

GBP£ 25

Fee + £10

JPY¥5,000

Fee + ¥2,000

AUD$50Fee + $20

USD Accounts ONLY

Check: No fees are applied for the first withdrawal processed within a calendar month. If more than one withdrawal is processed within a calendar month, a fee of $15.00 will be deducted from the withdrawal.

PayPal: No fees are applied for the first withdrawal processed within a calendar month. If more than one withdrawal is processed within a calendar month, a fee of $15.00 will be deducted from the withdrawal.



So, I take it as a check being sent is free as long as it is only once a month. Wire transfers, you get charged. I will stick with the check. They also said that if you open an account with a check, a check will be sent and it youopen an account with a wire transfer, will will be wired your withdrawl.
JOHN 3:16
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