Sincere opinion on Oanda

[atticus]

Quote from Putin's puppet:

Yeah make it free for $10,000 accounts or something like that. So you keep out the trading kids who are just playing with $10 of mommy's pocket.

Yeah, clients to maintain $10k or equivalent to access free API. They would get another 10k accounts the first few weeks. Algo is much more profitable than discretionary.

 

[dhpar]

Quote from Putin's puppet:

trade interest positive and you can cash in additional money, look at the Aussie pairs.

that's not what i meant.

i mean if you are flat one currency you can still get charged the interest.

say you are long USD13 vs short EUR10. now you buy CHF13 for USD13. so you are now long CHF13 vs short EUR10. you have zero USD exposure. but still you pay net interest (spread) on USD13 of about 50bps annually. that wipes out your advantage over IB in less than a day...not mentioning when you have the position for weeks...

to use the example of EUR1MM after one day you already saved USD6 with IB because IB charges interest only on net balances...

unfortunately when I use IB this is exactly how I use it - to manage my overall FX risk.

 

[Putin's puppet]

Quote from dhpar:

that's not what i meant.

i mean if you are flat one currency you can still get charged the interest.

say you are long USD13 vs short EUR10. now you buy CHF13 for USD13. so you are now long CHF13 vs short EUR10. you have zero USD exposure. but still you pay net interest (spread) on USD13 of about 50bps annually. that wipes out your advantage over IB in less than a day...not mentioning when you have the position for weeks...

to use the example of EUR1MM after one day you already saved USD6 with IB because IB charges interest only on net balances...

unfortunately when I use IB this is exactly how I use it - to manage my overall FX risk.

I simply go short EURCHF. lol

 

[dhpar]

Quote from Putin's puppet:

I simply go short EURCHF. lol

lol
well you probably still did not get it. if you short EURCHF only then you have a different risk profile. for the same risk profile you would have to close EURUSD as well - again crossing the spread. this is obviously what Oanda will be happy about - giving them again the half of the mark up.

it really depends on what is your trade horizon. if it is longer than a day, it is a decent size and you trade multiple currencies/pairs IB gets you a better rate. that's at least my case.

 

[dhpar]

Quote from Putin's puppet:

I simply go short EURCHF. lol

also this assumes that you manage your risk by currency pairs. this is probably fair enough if you trade FX only.

but i manage risk by each individual currency exposure - and the only thing that really matters to me is how much of each currency i have at the end of the day...and hedge/trade accordingly.

btw on the trading floor of any larger institution this is how (non-FX) traders look at FX risk - and how limits are set by risk managers...

 

[atticus]

Quote from Putin's puppet:

I simply go short EURCHF. lol

What if you're legging into the synthetic through a normal course of trading various pairs? It is a valid point that Oanda does not calc the swap against dissected-exposure, which is a disadvantage, but Oanda's swap rates are a lot better.

 

[Pippi436]

Same goes for margin, its per ccy pair and not per amounts. But still, 50x is plenty, even with this.

 

[atticus]

Quote from Pippi436:

Same goes for margin, its per ccy pair and not per amounts. But still, 50x is plenty, even with this.

Oanda has a lot of advantages. One-pip units allow for low-risk runs with algo-trading. I use the API and it's a lot better than IB's. I don't trust testing on IB's demo, as it's impossible to replicate microstructure when trading equities.

Oanda's option markets are *the best* OTC indications you will find, period. There is even an edge in one position. The only caveat is that they sometimes forget to "turn on" the vol-server.

 

[Putin's puppet]

Quote from atticus:

What if you're legging into the synthetic through a normal course of trading various pairs? It is a valid point that Oanda does not calc the swap against dissected-exposure, which is a disadvantage, but Oanda's swap rates are a lot better.

I know and it was a joke and couldn't resist.
So yes I got what Mr. D wanted to say.

 

[dhpar]

no argument on financing costs? so Oanda is not so good after all.....