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OANDA spread on EURO 3.0

  • #1
  • First Post: Jun 9, 2011 7:47am Jun 9, 2011 7:47am
What gives - Oanda's spread has been unusually high this A.M. and 15 minutes after news it is still at 3 pips on EURUSD!!!

That is higher than the spread on AUDUSD.
  • #2
  • Jun 9, 2011 8:02am Jun 9, 2011 8:02am
You are truly a well-informed trader Better check the calender.
Measure twice, cut once
  • #3
  • Jun 9, 2011 8:38am Jun 9, 2011 8:38am
and you are a dick. i am not new to this. the spreads do not normally stay that wide for more than a few minutes - 15 minutes is an unusually long time for news related spread increases.
  • #4
  • Jun 9, 2011 9:40am Jun 9, 2011 9:40am
You might want to reconsider your personal definition of "news."

Jean-Claude Trichet's ECB post-rates press conferences usually last just over an hour, from 12:30 - 1:30+ GMT and can be (as was the case today) major market-moving / volatility-spiking events, in direct response to what he is saying -- or not saying -- at any given moment.

What would be extremely unusual would have been for Oanda to go back to business as usual and for the spreads to return to normal at the time of your OP, when Trichet was just beginning to warm up... on inflation, Greece, etc.

Bloomberg UK (free) live stream usually carries such events live, while pre-empting regular Bloomberg TV programming. Closely watching price action and listening to words as they are spoken can be fun and... occasionally useful.
  • #5
  • Jun 9, 2011 10:02am Jun 9, 2011 10:02am
Quoting nhct
You might want to reconsider your personal definition of "news."

Jean-Claude Trichet's ECB post-rates press conferences usually last just over an hour, from 12:30 - 1:30+ GMT and can be (as was the case today) major market-moving / volatility-spiking events, in direct response to what he is saying -- or not saying -- at any given moment.

What would be extremely unusual would have been for Oanda to go back to business as usual and for the spreads to return to normal at the time of your OP, when Trichet was just beginning to warm up... on...
I actually learned something from your post. Thank you. Your post was useful and enlightening, unlike the previous smug response.

I apologize for my childish response.
  • #6
  • Jun 9, 2011 11:22am Jun 9, 2011 11:22am
Trichet may be speaking, and volatility may be higher than usual, but spread is supposed to be based on liquidity.
  • #7
  • Jun 9, 2011 11:56am Jun 9, 2011 11:56am
Typically most brokers widen spreads and delay execution time on major news events like the ECB rate change.

Theoretically speaking though spreads should be based on liquidity directly tied to libor rates.

BTW, I checked Oanda's spread history of EURUSD and saw a high of of 1.9 at the time of the release which then decreased to 1.3 - 1.2. Never saw 3 pips wide
  • #8
  • Jun 9, 2011 12:06pm Jun 9, 2011 12:06pm
Quoting Drewfired
Typically most brokers widen spreads and delay execution time on major news events like the ECB rate change.

Theoretically speaking though spreads should be based on liquidity directly tied to libor rates.

BTW, I checked Oanda's spread history of EURUSD and saw a high of of 1.9 at the time of the release which then decreased to 1.3 - 1.2. Never saw 3 pips wide
There must be some tom foolery going on because i was at my monitor and the spread went to 10 for a bit then 5 mins in it was at 5, 5 mins later it was 4 and 15 mins after the news it was at 3. Normally it widens to 10 for 1 min and then drops back to the spread it was previous to the news announcement.
  • #9
  • Jun 9, 2011 1:50pm Jun 9, 2011 1:50pm
Quoting enochben
There must be some tom foolery going on because i was at my monitor and the spread went to 10 for a bit then 5 mins in it was at 5, 5 mins later it was 4 and 15 mins after the news it was at 3. Normally it widens to 10 for 1 min and then drops back to the spread it was previous to the news announcement.
Like all brokers, there are some little tricks done here and there at Oanda also. One of the things I've noticed is they will every now and then put their spread at 0.8 or less. The times are odd because it's usually pre-Asian session or early Asian session when you would think liquidity is low with Europe and US closed (so less people available to take advantage of it). My thought is they intentionally lower it to bring down the average spread for marketing purposes.
  • #10
  • Jun 9, 2011 2:16pm Jun 9, 2011 2:16pm
Quoting 2+2=4ex
Like all brokers, there are some little tricks done here and there at Oanda also. One of the things I've noticed is they will every now and then put their spread at 0.8 or less. The times are odd because it's usually pre-Asian session or early Asian session when you would think liquidity is low with Europe and US closed (so less people available to take advantage of it). My thought is they intentionally lower it to bring down the average spread for marketing purposes.
yes! last night during the asian session the spread was 0.9 - if the spread is based upon liquidity then are they intimating that the asian session is the period when the most liquidity is available?
  • #11
  • Jun 9, 2011 3:35pm Jun 9, 2011 3:35pm
Having been very intimate with Oanda over the past year and a half,
I have come to the conclusion that their practices have been less than
fair this year.

It may come from their integration of MT4 (or some failing thereof).
The way they manage their internal matching order book, their liqudity providers, or something else has changed... much to the disadvantage of the general retail customer.

Examples: May 4, 2011 (the day before Euro Bid rate announcement) 0.8 pip spread throughout US/London overlap.

May 5, 2011 (Euro Bid Rate announcement day) 0.8 pip spread throughout London/US overlap

May 6, 2011 NFP 1.0 pip spread throughout US/London overlap

We've had nothing like this since (or before) but yet.... for complete sessions these conditions existed for these days.

They are tinkering... all that I can figure... is that they know the "market" can/will pay 1.2 pips spread as norm.....with 1.5 pip or higher during volatility.

Crazy stuff like the original poster mentioned doesn't surprise me.

Things are changing, liqudity providers are getting "beaten" by high frequency algorithms?
...Or no one wants to be in the middle anymore... I don't know.

I rarely traded anything higher than 0.9 pips with Oanda for an entire year last year.
They have more retail accounts than ever.
They have brought the use of MT4 to their customers.... spreads should be lower.
They are not.
  • #12
  • Jun 9, 2011 4:10pm Jun 9, 2011 4:10pm
I'd been with Oanda since late 2005.

For most of the time I considered them the best Fx broker.

Early this year I made the move from Oanda to TD Ameritrade (thinkorswim).

Oanda spreads do widen drastically whereas TDA typically has a fixed spread 2.5 points.

Since I don't scalp, I don't consider this a large cost difference as TDA's platform is literally outstanding. Oanda's is adequate but leaves a lot to be desired.
Capital Preservation is key to long term wealth accumulation
  • #13
  • Jun 9, 2011 7:04pm Jun 9, 2011 7:04pm
Quoting Intu
Having been very intimate with Oanda over the past year and a half,
I have come to the conclusion that their practices have been less than
fair this year.

It may come from their integration of MT4 (or some failing thereof).
The way they manage their internal matching order book, their liqudity providers, or something else has changed... much to the disadvantage of the general retail customer.

Examples: May 4, 2011 (the day before Euro Bid rate announcement) 0.8 pip spread throughout US/London overlap.

May 5, 2011 (Euro Bid Rate announcement...
I agree with all of this, I have also noticed the spreads are occasionally different between the FXtrade platform and the MT4 platform. I have been happy with Oanda, but the more I transition to longer term trading the less comfortable I am trading with them. I still think they are the best amongst the market makers though.
  • #14
  • Jun 9, 2011 10:13pm Jun 9, 2011 10:13pm
Quoting Intu
Having been very intimate with Oanda over the past year and a half, I have come to the conclusion that their practices have been less than fair this year.
It may come from their integration of MT4 (or some failing thereof).
The way they manage their internal matching order book, their liqudity providers, or something else has changed... much to the disadvantage of the general retail customer.
I agree with you. Something has changed at Oanda and they are no longer competitive. I have also moved my account elsewhere.
  • #15
  • Jun 9, 2011 10:40pm Jun 9, 2011 10:40pm
Quoting PipStar
I agree with you. Something has changed at Oanda and they are no longer competitive. I have also moved my account elsewhere.
But but; you can trade on the weekends along with about another 100 traders and take advantage of those unbeatable tight spreads.

  • #16
  • Jun 10, 2011 6:47am Jun 10, 2011 6:47am
spread at 6:30 am CST
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spread at 6:40 am CST
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  • #17
  • Jun 10, 2011 10:03am Jun 10, 2011 10:03am
Quoting PipStar
I agree with you. Something has changed at Oanda and they are no longer competitive. I have also moved my account elsewhere.

Your moved to ...?
  • #18
  • Jun 10, 2011 6:28pm Jun 10, 2011 6:28pm
Quoting Drewfired
Typically most brokers widen spreads and delay execution time on major news events like the ECB rate change.

Theoretically speaking though spreads should be based on liquidity directly tied to libor rates.

BTW, I checked Oanda's spread history of EURUSD and saw a high of of 1.9 at the time of the release which then decreased to 1.3 - 1.2. Never saw 3 pips wide
Yes, Oanda spreads can sometimes widen for no apparent reason or fail to return to pre-news levels for too long around some news. However, I believe they do report them accurately, no matter what.

Here's Trichet yesterday:

http://thumbnails45.imagebam.com/136...c136088654.jpg

That's from Recent Oanda Spreads, set to EDT (GMT-4). That page is delayed at least 15-20 hours, and yesterday was no exception. Your reply was posted 4.5 hours after Trichet started speaking, so not sure where you checked.
  • #19
  • Jun 11, 2011 5:15am Jun 11, 2011 5:15am
Oanda spread is getting worse, but what we had before was too good to be true fixed at 0.9

However, the alternative which is second best is MB Trading, they will give you a slippage if there is volatility which is not even close to what it should be...

You can however, say that the slippage can go either way and will do so after a couple of hundred trades so it doesnt really matter...

conclusion: stay with Oanda and remember that this cost is nothing compared to stock trading...
  • #20
  • Jun 11, 2011 5:33am Jun 11, 2011 5:33am
Quoting Larseg
Oanda spread is getting worse, but what we had before was too good to be true fixed at 0.9

However, the alternative which is second best is MB Trading, they will give you a slippage if there is volatility which is not even close to what it should be...

You can however, say that the slippage can go either way and will do so after a couple of hundred trades so it doesnt really matter...

conclusion: stay with Oanda and remember that this cost is nothing compared to stock trading...
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