What does the Cash FX Translation Gain/Loss line on my Daily Activity Statement represent and how is it calculated?

Overview: 

 

In order to provide a comprehensive snapshot of your account equity for statement generation purposes, any long or short cash balance in your account which is denominated in a currency other than that which you have designated as your Base Currency must be converted at the then prevailing exchange rate. As exchange rates tend to vary from one period to another, this conversion process is likely to result in a Cash FX Translation balance that is either positive (i.e., a gain) or negative (i.e., a loss).  It should be noted that these gains or losses represent a mark to market calculation (i.e., as if all non-Base Currency balances had been closed out at the end of day exchange rate) and the actual gain or loss, if any, can not be determined until such time the non-Base Currency balance has been closed.

 

The Cash FX Translation Gain/Loss for any given non-Base Currency is determined by first calculating the difference between the Base Currency exchange rates as of the current and prior daily statement periods (exchange rateC – exchange rateP , where rates are made available in the Base Currency Exchange Rate section of each statement;). This difference, positive or negative, is then multiplied by the Starting Cash balance for the current statement period to determine the Cash FX Translation gain (if positive) or loss (if negative).  As all other non-Base Currency details (e.g., net trade sales and purchases, commissions, interest, etc) are booked as of the end of day for currency translation purposes, they have, by definition, no translation gain or loss.

Glossary terms: 

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