Let’s assume that we are at the opening of the European markets (03:00AM in New York), Monday.
I buy and sell stocks (day trading) then I decide to stop at 9:00 am. And I want to use my profits to operate in the American market.
We agree to say that the delivery payment deadline will only be effective on Wednesday (D+2).
But I have the possibility to buy currencies because the currencies are also delivered at D+2, but if Tuesday is a public holiday in Europe my shares will be settled at D+3 and therefore I will not be able to buy currencies with my account cash.
If my European stocks will be set at D+2, I can buy dollars to day trade on the American market.
at the end of the American session, then I convert dollars again into €/£… to operate another market and or hedge against the dollar exchange risk etc…
And repeat this process several times, so is using undelivered currencies to buy stocks or other currencies allowed?
Because I can buy spot currencies ten times, even though the first exchange has not yet been settled.
Of course this is only possible if the currencies have the same settlement delivery time.
I would like to clarify, I do have a cash account, European cash accounts are different from American cash accounts, because there is no Good-Faith Violations rule.
When I click to convert my currencies, my currencies instantly appear in my account and I am immediately subject to currency exchange risks.
Is this permitted with the qabd al hukmi methodology?
My broker is Interactive Brokers Ireland