IB vs. Oanda

Discussion in 'Forex Brokers' started by JHC, Jun 9, 2007.

  1. JHC


    Just want to check people's experience trading forex with IB or Oanda. Few specific questions:

    - Spread: For liquid pairs like EURGBP, EURUSD, EURCHF, the spread for Oanda is usually around 1.5 to 2.0 pips. Anybody know how its like for IB?

    - Execution/Relability

    - Interest Earned/Paid

    Thanks all for the feed back
  2. cstfx


    IB's spreads on EUR dominated currencies range from 0-2 pips, mostly .5-1, with commish ($2 each side, less on volume) add 1/2 pip to that spread.

    IB pays interest only on amounts in excess of 10k.

    IB's platform doesn't freeze and lock you out during NFP or other news moving events.
  3. rayl


    I don't know if the two should be compared on these points without first considering the bigger difference: Oanda is a dealing desk model whereas IB is an ECN model. That is a much more important decision to make before choosing a broker w/in the model you select.
  4. cstfx


    I think the OP is looking for a straight-up comparison based on his needs, so I think it is a fair question. If he is looking for thin spreads, interest on his deposits, and reliable platform, a fair comparison can be made between Oanda and IB.

    But like rayl said, their is a distinct difference between an ECN and a market maker. Various posts here I have expounded on the benefits of ECNs and why you should seek one out if you are serious about trading currencies.

    One thing also is that if you trade news and you are able to work the Oanda platform during these times (I have been locked out for up to an hour!!!!) you will find that the spreads offered are considerably wider than you would expect to find on an ECN. ECNs tend to return to equilibrium quicker than market makers.
  5. siki13


    Also it would be nice if someone could compare carry rates.
    How much it cost holding lets say GBPUSD position for 5-10 days with oanda and
    how much with IB?
  6. rayl


    At IB, it depends on the size of the position. See this page:


    Take the interest earned on the long balances less interest charged on short balances.
  7. 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.
  8. Candara

    Candara Guest

    25K usd or more -> IB
    below 25K usd -> Oanda
  9. mcheema


    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
  10. 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.
    #10     Jul 16, 2007