Differences in Oanda natural gas prices?

I trade cfd commodities in oanda as well as forex and indices.

I have been following nat gas last years. It has been one of the best bull markets lately. It has double since mid 2012. A very nice bull market to ride. The prices Oanda has been offering are similar to those of other cfds providers or the futures markets. 5 cent, 10 cent but last weeks I find an unacceptable difference in prices.

Today the price in other cfds providers and futures markets is aprox 6,1 and in oanda is 5,17 ...it is a 20% price difference lol sometimes I think that it must be a joke it is not. it is the truth. you just have to see their prices in their website.

The last month nat gas has risen 20% from 5 to 6 aprox. but the today oanda quotes 5.17..just a 3% move. I mean; this is ridiculous

if you ask them they say they have their own prices. But, come on are you telling me that every time a market makes a 30% breakout you can quote just a 5% move?

I can accept wider spredas, financing costs, slight differences with the underlying price, but I can not accept this.

The other commodities and indices are priced fairly, the difference with other brokers is not relevant.

Well, as I can see what they are sort of doing is an average with the futures contracts. The thing is that march contract is 6ish and april contract is 4.8ish
that is where the big difference is.

Actually it is the only commoditie market that is showing such a big discrepancy between their nearest (marh and april contracts. the other markets are fine.

lets see what happens when the rollover occurs in some days.

This is a bit weird actually. because every other cfd broker is quoting almost march future contract. IG markets, CMC markets, Saxo Bank plus500...all of them are quoting 6,1 aprox for the cash nat gas, but oanda seems to be the only one that averages march and april contracts in some way

I think that I will have to look for an alternative to trade the commodities cfds...I wish I had 1.000.000€ to trade the futures market directly in an efficient way

So arbitrage them.

Buy on OANDA, sell on FXCM/CMC/Saxo, and wait until the prices realign.

Yes...I was thinking about that. That would be trading the spread or the basis. Sell the march contract and buy the april one..

Recently brought up the same issue with Oanda. Below is the reply I received.

Title: nat gas highs off 40 cents?

Dear XXXXX,
Thank you for contacting OANDA.

Please be advised that OANDA's CFD spot prices are derived from futures contracts. Our prices are computed by discounting/present valuing the futures contract over the time between the current date and the expiry date of the futures contract to get a cash/spot price so that you do no need to worry about rolling your trades to the next futures contract (i.e. our CFDs do not expire). The discounting rate will remain constant as long as the CFD price references the current futures contract. In other words, it will remain constant until the roll of the futures contract to the next futures contract. Please note that our traders determine the time when they roll over the futures contracts by themselves.
In addition, fxTrade charts are based on AVERAGE prices and MT4 charts are based only on BID (Sell) prices while most of futures charts are based on LAST prices.
That's why you can notice the difference between real futures prices and our spot (cash) prices.

I hope this information was helpful.

yes...thank you

Yes - i think Oanda does use some sort of futures strip, and not only the frontmonth contract for their prices. Also, if you hold commodity CFDs for a longer period, you will notice that the difference to the futures price is in the carry you pay/receive overnight. This is substantial if you hold for weeks. Be sure to check out the Oanda interest rates page. Rates for commodities are all over the place and keep changing a lot.