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OANDA Review: We Weigh the Pros and Cons



OANDA, co-founded by Dr. Stumm and Dr. Olsen in 1996, advertises that it does “all things currency,” from currency conversion to providing FX data services for businesses to offering an established global online brokerage service to individuals seeking to trade the retail FX and CFD markets.To get more news about oanda review, you can visit wikifx.com official website.

Globally, OANDA offers two account types, standard and premium, and a product catalog that includes a wide range of CFD and spread betting offerings across a variety of asset classes, although all are not available in every region that it services. In addition to FX, the broker also offers indices, metals, commodities, and bonds to provide trading opportunities across financial markets.
OANDA offers most clients varying degrees of account protection depending on the region. OANDA Europe Limited offers ESMA-mandated negative balance protection, while OANDA Asia Pacific Pte Ltd. offers guaranteed stop loss orders. U.S. clients are the exception as OANDA Corporation does not offer their accounts any such protections.

In the U.S., OANDA ranks among the top in the CFTC's Retail Forex Obligation report which "represents the total amount of funds at an FCM, RFED, or FCMRFD that would be obtained by combining all money, securities and property deposited by a retail forex customer into a retail forex account or accounts, adjusted for the realized and unrealized net profit or loss."

A well-organized website with a stated goal of transparency, emphasis on client education and research, multiple user interfaces, and global regulatory oversight place OANDA in the top tier of online forex brokers.
Who OANDA Is For
OANDA offers clients exposure to a variety of financial instruments but is a good fit for seasoned traders looking for a stellar desktop trading experience. Product offerings vary by region. For example, U.S. clients can only trade FX, but the broker boasts fast and reliable trade execution, research resources that are above industry norms, functional user interfaces, and a verifiable track record of regulatory oversight.
OANDA, as is the norm in the brokerage industry, generates revenue via the spread that is offered to the client. Its spread structure is quite simple and consists of two pricing options, “spread only” and “core pricing + commission.”

The former generates revenue through customer trades that "cross" the bid/ask spread while the latter adds a base commission of $50 per million to the raw spread, which is on par with industry standards. Commission charges are aggregated and posted to client accounts as cash adjustments.

These pricing options are easily found on OANDA's website(s) and are available for both account types that the broker offers, although the shown spreads will vary. For example, the minimum EUR/USD spread for U.S. clients on a "standard" account under the "spread only" model is 1.3 pips while the "core pricing + commission" model shows a raw spread of 0.4 pips.

OANDA advertises the use of an automated engine to attempt to follow global pricing closely, but spreads are still subject to market volatility and liquidity. In keeping with its ethos of transparency, OANDA publishes historical spread data for all of its asset classes.

U.S. clients have the option to participate in OANDA's "advanced trader program" which is a 3-tiered reward system for high volume traders. Benefits include spread or commission discounts, being assigned a "dedicated relationship manager," API support, free VPS and wire transfers, and discounted access to third-party platforms. Tier 1 requires that the client deposit at least $20,000 or transact more than $10 million in monthly volume, whereas tiers 2 and 3 require monthly volume ranges of $100-$500 million and $500+ million, respectively.

OANDA does not have a minimum deposit requirement for customers wishing to open a "standard" account, but logic dictates that this amount will be subject to the margin requirements of the smallest trade size that the customer wishes to place.

"Premium" accounts require a minimum deposit of $20,000 which gets the client added perks like unlimited free wire transfers.

OANDA's forex funding fees, charged on positions held overnight, are described as "a blend of underlying liquidity providers' tom-next rates, adjusted by our x% admin fee (annualized)."

In addition to a monthly inactivity fee "of 10 units of the currency in which your account is denominated when there are no open trades in your account for a period of at least 12 months," the broker also lists fees for deposits/withdrawals, bank wire transfers, and debit card and ACH transactions.