Oanda's possible spot market share.

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DepthTrade

Hello, I am trying to figure out what Oanda's volume is in regards to the total global volume. I have used the following available information to try and guesstimate that number. If you have anything to add or see anything I could be overlooking please advise.
So far I have from Wikipedia & ForexMagnates
Global spot volume $1.6 Trillion

USA market share of all global products 19%.
1.6x19%=$320 billion

Number of Oanda accounts in USA, 22% of all national accounts.
320x22%=70.4 billion

Oanda average max leverage for major pairs 33:1
$70.4 billion divided by 33= $2.1 billion

Possible global spot leverage used 100:1
$1.28 trillion divide by 100= $12.8 billion
2.1 / 12.8= 16%

Could Oanda possible have 16% of the global spot retail market?
I understand this is far from scientific, but it's the closest I can come up with. The are some unknown variables, like the fact that Wikipedia says retail is 10% of spot market. How much of the Not-retail spot market uses leverage, if any is used.
If one just divides 1.6 trillion by 70.4 billion= 4.4% is what Oanda market share could be. I know 4.4% and 16% seem extremely high, but the USA is one of the bigger trading groups and I would guess trade some of the larger amounts.

If you have anything to add or see anything overlooked, please feel free to make any suggestions.
 
Oanda is a counterparty market-maker, not a broker per se. That's not to say that they're not engaged in the worldwide forex markets, of course, and doubtless they have their own liquidity providers for off-setting their net liabilities, etc., but it does also raise some rather fundamental questions about the validity of what you're apparently trying to work out. Not to put too fine a point on it.
 
Xela said:
Oanda is a counterparty market-maker, not a broker per se. That's not to say that they're not engaged in the worldwide forex markets, of course, and doubtless they have their own liquidity providers for off-setting their net liabilities, etc., but it does also raise some rather fundamental questions about the validity of what you're apparently trying to work out. Not to put too fine a point on it.
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Thanks for the reply. I am trying to figure out what exactly I am seeing when I look at volume on their charts and looking at data provided in their FxLabs tools.
I am currently using oanda data to base all my trades off of and wonder how much of the "global" market I am seeing.
Just wondering if I am only seeing a tiny sliver or an acceptable chunk of the market. I am currently profitable, but feel a bit uneasy knowing I can't see much.

Thanks again, if anybody has can chime in, feel free.
 
Sounds like you're asking two very different questions.

1. How much market volume is traded through Oanda into the spot market (which will be incredibly minimal, by the way. As noted above, Oanda are a retail market maker)

2. Are you viewing the entire market when trading through Oanda and do the charts represent the entire market. (Which, kinda shows you're not understanding how 'retail' brokers operate, regardless of their LPs. The key word being 'retail') - yes you are viewing the entire market. The differential between price within the same fx pair from broker to broker will be minimal; depending on the relationships with their LPs.

Competition between brokers ensures price feeds are competitive, regardless of how much volume a certain broker may pass into the spot market.

Eidit: just seen you mentioned volume on Oanda as a trading indicator. No, this will not represent the entire market. Most likely just internal order info from Oanda. The problem comes about because the fx markets are not centralised.
 
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paulchaney said:
I am trying to figure out what exactly I am seeing when I look at volume on their charts
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As with any counterparty market-maker, you're seeing (probably) just their own volume, or (just possibly, but much less likely) some kind of amalgamated feed from their own liquidity providers. In either case, it has very little to do with the volumes being traded in the interbank markets.


paulchaney said:
I am currently using oanda data to base all my trades off of and wonder how much of the "global" market I am seeing.
More...


None.

What you're seeing is a very small part of a different market from the "global" (interbank) market.

If you want to see volumes that mean something, you need to look at forex futures, not at spot forex.

This is inherently a qualitative issue, not just a quantifiable one: it's a different market (but even so the proportion you're seeing is too small to signify much).
 
RISKonFX said:
Sounds like you're asking two very different questions.

1. How much market volume is traded through Oanda into the spot market (which will be incredibly minimal, by the way. As noted above, Oanda are a retail market maker)

2. Are you viewing the entire market when trading through Oanda and do the charts represent the entire market. (Which, kinda shows you're not understanding how 'retail' brokers operate, regardless of their LPs. The key word being 'retail') - yes you are viewing the entire market. The differential between price within the same fx pair from broker to broker will be minimal; depending on the relationships with their LPs.

Competition between brokers ensures price feeds are competitive, regardless of how much volume a certain broker may pass into the spot market.

Eidit: just seen you mentioned volume on Oanda as a trading indicator. No, this will not represent the entire market. Most likely just internal order info from Oanda. The problem comes about because the fx markets are not centralised.
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Hello RiskonFx, thanks for responding.
Wikipedia says retail is 10% of spot market = $160 billion.
USA makes up 19% of volume about = $32 billion.
Forexmagnates shows Oanda as having 22% of national accounts = $7 billion.
7 divided by 160 = 4.4%
I know this is back alley math, but is it possible Oanda is 4.4% of retail volume?
 
Xela said:
As with any counterparty market-maker, you're seeing (probably) just their own volume, or (just possibly, but much less likely) some kind of amalgamated feed from their own liquidity providers. In either case, it has very little to do with the volumes being traded in the interbank markets.





None.

What you're seeing is a very small part of a different market from the "global" (interbank) market.

If you want to see volumes that mean something, you need to look at forex futures, not at spot forex.

This is inherently a qualitative issue, not just a quantifiable one: it's a different market (but even so the proportion you're seeing is too small to signify much).
More...
Ok, thanks for your time.
 
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