Profit/loss changes depending on currencies

Hi fellow investors,

I saw something I didn’t understand:

I bought fractional shares from a US company in £. When I look at the “Your investment” bit below the graph, I can choose to see the current value, nb of shares, average price/share and investment gain/loss in £ or in $. The weird thing I see is that in £, it shows a net loss while in $ it shows it shows a net gain.

Can anybody explain why that is ?

Because the $ share price has gone up - but the $ has dropped against the £ more in % terms.

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Every forex transaction has costs associated to it:

  • a FX fee
  • exchange rate related costs
  • US tax on dividends

The best ways to see them is to carefully look at every contract note and periodically download the FT activities to do some analysis.

If you are a very active trader in US, for instance, you may realise that the total FX cost partially or completely offset the dividends you receive in the same period. FT was not designed for frequent/daily trading, although transactions are in average way cheaper than most of the big competitors out there.

I download the activities at least every 2 weeks and pivot the costs in Excel in various way to check trends and unhealthy (i.e. expensive) patterns. That’s how I discovered some hidden patterns of emotional trading I was not even aware of, and saved myself hundreds.