Oanda – Bringing Global Markets Closer With Cross-Platform Trading Access – CoinJournal

Oanda is a global broker that offers access to global markets through a simple, easy-to-use platform. Traders and investors can profit from currency pairs, stocks, precious metals, commodities, indices and cryptocurrencies at low cost.

The global powerhouse was founded in 1997 by computer scientist, Dr. Stumm and economist, Dr. Olsen, as a company that published currency conversion prices online free of charge.

Over the years, the company grew to accomplish impressive feats like introducing fractional pips (called pipettes) and becoming the biggest FX broker in Japan. Now, they stand as a multi-asset brokerage house that is plugged into global markets and offers its services to individuals and institutions worldwide.

This review dives into Oanda’s trading platform, the assets it offers, and how individuals and institutions can benefit from it.

How It works

Oanda started as an FX trading platform but has since expanded to trading about 7 types of assets. They include

Forex currency pairs

Oanda offers 68 currency pairs including majors like EUR/USD, minors like GBP/CAD, and exotics like USD/MXN. Its spreads range from 1.4 pips on major pairs to 4.1 pips on more exotic ones.

The broker derives their FX prices from liquidity providers and aggregates them to find a middle point. This mid-price isn’t fixed but fluctuates throughout the day, however, Oanda claims that its providers are top-tier banks and, as such, provide favourable pricing compared to its competitors.

Forex trading is available to users in all major geographical regions where trading currency pairs is legal.

Global Indices

Oando offers a contract for differences (CFDs) for 15 global indices that track markets in the United States, Britain, Europe, France, Germany, Russia, Singapore, and China. Traders can leverage the CFDs to either long when the market is trending up or short when the market is trending down.

The Indices’ prices are derived from futures and spot prices of the underlying instruments. The raw prices are adjusted for broker spreads which start from 1 point for indices like the UK100 and Germany30 and go as high as 30 points for indices like the US Russell index. Note that a point in stocks and indices is a whole number, so a move from $20 to $21 is a 1-point move.

Commodities

Oanda’s commodities CFDs span from natural gas to wheat, corn, crude oil, palladium, platinum, sugar, and copper and are available to all users across the globe where trading commodities is legal.

Similar to indices, the broker gets its commodities CFD prices from futures contracts aggregated from its liquidity providers. Spreads start at 0.6 points for natural gas and go up to 200 points for more exotic commodities like Palladium.

Metals

Oanda’s metal assets are limited to gold and silver, but the CFDs are paired with major currencies like USD, GBP, JPY, AUD, CAD, CHF, EUR, HKD, NZD, and SGD. Spreads start from 10.1 cents for a Gold/Silver pair, 25 cents for Gold, and 150 cents for Silver.

Bonds

Traders can choose up to 7 bond CFDs like the US 10Y bond, the US 2Y bond, or the UK 10Y Gilt. The spreads range from 1.3 pips to 4.1 pips.

Shares

Oanda offers access to about 21 European stocks via CFDs with commissions as low as 0.1% for each side of a transaction i.e. opening and closing a position. This means that the total commission for a full trade is 0.20%.

The broker also charges for certain corporate actions that affect the value of the CFD. For example, a 23.67% fee is charged for dividend payments on long CFD positions of German stocks. The charge is 19% for Spanish shares, 15% for Dutch shares, and 15% for French shares.

Stock CFDs are not available to all traders, only those in the British Virgin Islands and specific regions have access to it.

Cryptocurrencies

Traders have access to 13 major crypto CFDs with spreads as low as $6 for Litecoin and up to $9000 for Polkadot. Note that these spreads are for full lots i.e. 100,000 units of currencies and cryptos. For example, the spread for 100,000 units of Polkadot/USD is $9,045 at the time of writing.

Key Features

Multi-Platform Trader

Oanda’s trading terminal has web, desktop, and mobile versions for traders in their homes or on the go. The broker also integrates directly with the popular charting software, TradingView, to allow traders to execute trades directly from their favourite trading software.

Flexible Deposit and Withdrawal Options

Oanda accepts deposits in various currencies, depending on your region, through payment channels like bank transfers, wire transfers, Visa, Mastercard, Neteller, and Skrill. However, certain regions come with specific methods. For example, US traders can also deposit through PayPal and SWIFT transfers. 

Withdrawals are processed through credit cards first, electronic wallets next, and then bank transfers. However, this order may change with the region.

Algorithmic Trading Templates

Traders can access sophisticated algorithms that execute trades on their behalf with the MetaTrader4 platform premium package or Oanda’s web trader which comes with an Algo Lab, a platform that helps traders create algorithms using pre-built templates.

Customer Support

The Oanda Assistant bot is available 24/7 via live chat to help meet users’ needs. For those who prefer a personal touch, human agents are available via email 24 hours a day, 5 days a week.

Pros and Cons of Oando

Pros

  • Favourable spreads on CFDs

  • Available in several major geographic regions

  • An automated trading facility is available

  • Access to real-time news feed and expert technical analysis on the desktop trader

  • Compliant with regulations in regions of operation

  • Tax-free spread betting facilities

Cons

Why Should You Use Oanda?

Oanda is home to traders who want low spreads, quick executions, expert tools, and global support when trading assets in local and foreign markets. 

One way Oando stands out is in its use of technology to improve the currency trading market. It did this first at its inception, publishing currency exchange quotations for free before developing a trading system that allowed investors to get started with as little as $1.

Now, their cross-platform terminal supports algorithmic trading thanks to a partnership with Algo Labs.

Their FX spreads are favourable, as low as 1.4 pips for major pairs and 4.1 for more exotic pairs. Their collection is large enough to cater to traders who want multiple options at 68 currency pairs, 13 cryptos, 15 indices, 7 bonds, and 10 commodities.

The Verdict

If a globally-recognised broker with an innovative technology platform complete with expert analysis, premium charting software, and up-to-date news feeds is what you seek, then Oando is a great option.

The broker has come a long way from being a tech startup to a global financial trading powerhouse. However, remember that even with sophisticated trading tools and robots, CFD trading remains a risky venture that 76.6% of retail Oanda account holders lose money doing.

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