Anna, Do you have any experience trading with Oanda? Would you trust this company with 25K-50K of trading capital? They have an excess of capital to the tune of about 38 million. This is according to the US futures & commodities web site. Your comments are appreciated. Thank you.
Dear Leo
Lovely to hear from you again and I believe Oanda have recently increased their capital base to $100m+. Oanda is classified as a market maker but undertake not to trade against you. Its founder, Richard Olsen, is passionate about open market and the forex maket being accessible to all. They also limit leverage and I don’t think they allow anyone to trade at more than 1:50, indeed they even offer 1:1. In my opinion this is excellent as I believe that no trader should go above this limit. In addition they also offer options (see my new site: http://www.currency-options-trading.com) which explains this in more detail.
However, they are not suitable for “scalpers” because their spreads always widen (and sometimes very significantly) when markets are volatile. Also you cannot hedge on the same pair – ie go both long and short. The other main advantage of Oanda is that they pay interest on a minute by minute basis on any money deposited with them. I believe they are the only company to do so. One other option to consider is not to fund your account with such a large amount – start very small and pay in only as much as you need to avoid a margin call. I should also add that I have had an account with Oanda for almost two years but not connected with them in any other way. The above represents my own personal views.
I hope this gives you enough background. You can always post questions in some of the forex forums – oanda run one themselves where you will find some very trenchant views. Finally I think you should contact them direct and the question to ask is the level of compensation in the event of their failure.
I trust the above helps but if you need further assistance please just drop me a line.
Kind regards Anna
February 22nd, 2009 at 9:12 am