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Pippi436
Registered: Jun 2006
Posts: 607 |
06-10-07 08:04 PM
When it comes to interest/carry rates, Oanda is the best in the retail section bar none. For example, they pay 3.9% on EUR account balances for any size deposit. Quite good, considering the EUR base rate is 4.00%. Their IRs bid/offer is actually quite near LIBOR/LIBID. IMO a good broker for carry-style or longer-term traders.
If you are an active daytrader you may be better off using IB with their low transaction-costs, and their variety in frontends. Oandas order-entry is rather horrible IMO. In turn IB has horrible swaps and interest on balances.
Both have their strong and weak points, depends on the trading style which is the better choice IMO.
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mcheema
Registered: Jul 2004
Posts: 50 |
07-14-07 10:17 PM
i use both.
Oanda great for carry trading as pointed out
IB great for trading period assuming you have decent capital as pointed out earlier
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Trader KGB
Registered: Jan 2005
Posts: 965 |
07-17-07 04:02 AM
IB is currently lacking several currencies (NZD, NOK, etc). Oanda has virtually every currency in the world.
IB also suffers from a margin problem on crossrates. Both sides of the cross are considered separate vs-USD positions in their system, each subject to 50:1 margin. The end result is that crossrate margin is only 25:1. If you trade the yen carry crosses (EUR/AUD/GBP), you'll only have 25:1 buying power.
Oanda really has great swap rates and an amazing breadth of currencies available. If they gave up their dealing desk and switched to an ECN model, they'd be a powerhouse.
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sim03
Registered: Jun 2006
Posts: 513 |
07-18-07 05:14 PM
The margin thing is even more skewed when comparing IB vs. Oanda, because at IB you automatically get a margin call at the same 50:1 (majors) or 25:1 (crosses). No breathing room at all.
By contrast, Oanda has 50:1 leverage (all 38 pairs + spot gold and silver), but 100:1 before you get a margin call. Lots of breathing room.
Ironically, Oanda itself is not exactly competitive in terms of margin, vs. everyone else at 100:1 and up. But IB is 2 to 4 times worse still than Oanda, in practice.
IB isn't out of line when it comes to intraday and overnight leverage on currency futures, which have exactly the same risk profile as spot, so what could be the reason? Can't be the liquidity providers, who are known to work with other ECNs at 100:1.
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Trader KGB
Registered: Jan 2005
Posts: 965 |
07-18-07 06:19 PM
The initial and maintenance margin being the same at IB is indeed quite bizarre. I never got a conclusive answer as to why that is the case. Basically you'd never want to use 50:1 (or 25:1 on crosses) because as you mentioned, you'd get a margin call immediately unless the trade went directly in your favor.
That's also why I've stuck primarily to FX futures with them. They're mostly 80:1 with breathing room up to 100:1. They have their drawbacks too of course (no crosses, 5pm-6pm blackout, limited liquidity outside the majors, etc).
I will soon be switching to Currenex/Hotspot FXi with margins from 50:1 to 100:1 and commissions only slightly higher at $30/MM (well worth it imo).
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