Warning from Oanda to its traders, What is going on this weekend?

Pretty sure you can with oanda, but you are going to pay like a 15 pip spread over the weekend.

 

Yeah, was up to even 20 lately.

 

Not sure about the only, but have an account with them for almost 7 years already and never had issues or reasons to suspect them in anything shady.

 

This is a very rational move by OANDA. "Brokers" like OANDA or other FX "brokers" are closer to what Jesse Livermore called "bucket shops" in the old reminsciences of a stock operator. In the sense that they don't actually go out and buy when you put in your buy order.

I trade futures with Interactive Brokers. When i put my buy order out in GC for instance, i can see my bid in the market. They are actual brokers in the sense that all they do is make commissions, they actually buy gold for my account when i buy gold.

OANDA and other FX spot "brokers" do nothing of the kind. It's not to say that they don't ever hold any currencies. What they do is decide what they want to be in a currency. Let's assume that they want to be flat in the Euro. If they have $100m longs in Euro and $80m shorts in the Euro, then they may go out and short $20m Euro to come to flat. This is the best possible scenario, and in a sense they are merely taking the commissions and they act just like a broker. But they may not act like this at all. They may act like a bucket shop. They may run analysis on traders, see which traders are winners on average and which are losers and what the standard deviation of wins/losses are, and use that information to:

simply bucket orders for a consistant loser (just take on the other side of their trades)

Go along with winning traders, a winning trader buys $10m Euros, and they instead go $100m long euros

Or do any combination of the above due to their analysis. This creates counter party risk, if the "broker" goes broke, who knows what exactly happens to your funds.

In this instance, they see a lot of uncertainty, a fat tail on the distribution curve is possible, which may throw the calculations they are using into danger territory. So in order to reduce risk to themselves, they are taking this step to reduce the risk.

 

http://www.elitetrader.com/vb/showthread.php?threadid=244476

 

yeah, during this weekend:

- greece will exit eurozone
- spain will freeze banking transaction and cash withdrawals
- reactor in fukushima will release 20x chernobyl radiation
- israel will attack iran, after all its the most peaceful country on earth.
- china will show a middle finger to US bonds offerings
- ufos will appear near mt shasta in massive ships


well, seems like some volatility is ahead of us
:eek:

 

I was wondering how long it would take for this thread to go there.

 

Who said high volatility is a bad thing?

 

Is this a joke? trading is all about VOLATILITY. Sounds like their systems aren't up to snuff.

They should just raise margins if they want, like IB does.

 

Why? Did you see the hours they listed? Who the hell is going to trade during those times?

I will add.....IB also has insane slippage and then charges customers a commission on top. Glad we're not all like IB