oanda spikes

check out oandas honesty I got this off there site

JPY Pairs Price Spike on FXTrade Sunday 3pm EDT


There was a large spike on JPY currency pairs that affected some of our clients' positions and caused numerous orders to trigger. This spike was the result of bad prices that OANDA received from its liquidity providers. OANDA is, therefore, reversing the trades that were executed with these prices.
We ask you to be patient while we are working on this issue. We sincerely apologize
for the inconvenience this may be causing. Thank you.

Correcting the affected accounts is taking longer than originally announced. Please be patient as the technical and customer service teams continue to work on this issue. This is their top priority

Honesty? LOL. Well, maybe...

But there was a LOT of interest in JPY over the weekend (for obvious reasons) and I'm sure the punters would have been lining up bracket orders all over the shop. I’m rather surprised OANDA has ‘liquidity providers’ putting out any feeds during this period. And I’m also fairly certain they must not only aggregate their feeds, but also have filters in place to prevent any anomalous data hitting the front-end. Bit surprised that this wasn’t the case.

I’m not suggesting any duplicity on their part, it may all be exactly as they say, but you have to take a view that spikes are as likely to hurt them as their clients. While getting triggered into a trade that immediately comes back to ‘normal’ and stops out is no fun for Joe Punter, neither is getting your mug clients orders closed out for a large and unrecoverable profit. My guess is that it works very much in their favour to bust all orders.

I’ve got no axe to grind with OANDA. Used to use them before I found out they don’t segregate client funds. Oops.

I'm told these were not your ordinary spikes though - like usdjpy trading in 40s instead of 92 etc - almost sounded like only bid or offer was available in EBS or similar at one point (maybe right at the very start of welly trading?) and some chopshop data provider had an algo that just streamed out (bid+offer)/2, hence the odd price. Not unheard of, and clearly you can't fill people on those kinds of 'spikes'....

Do tell...

TheBramble said:

I’ve got no axe to grind with OANDA. Used to use them before I found out they don’t segregate client funds. Oops.

Click to expand...

What exactly did you find out and how? You can't just tease and leave us high and dry like that...

Cheers,

MP

PS. I met Richard Olsen once for dinner. We were the only two at the table not drinking and the restaurant had to send a guy out to buy another soda from the shop because neither of us would give up the last one. True. He seemed a decent enough fellow though. Very straightlaced ... very much the Quant Swiss Banker

There was no more to it than I mentioned. OANDA do not segregate client funds and have no plans to do so. However unlikely their ‘going under’ from their own commercial activities may be, if they did, they would potentially take their clients’ funds with them.

Shame, as I think they are one of the most innovative companies in the field. They offer facilities matched by few in terms of tailoring position size and making interest payments. Never met Olsen, but he strikes me as a clued-up type with a solid grasp of what the retail trading community wants. A step up from the SBs for sure.

A couple of links to threads on the topic.

http://www.trade2win.com/boards/forex-discussion/27018-best-way-forward.html#post367415

http://www.trade2win.com/boards/forex-discussion/26572-oanda-safety-clients-funds.html

TheBramble said:

Shame, as I think they are one of the most innovative companies in the field. They offer facilities matched by few in terms of tailoring position size and making interest payments

Click to expand...

TheBramble said:

I’ve got no axe to grind with OANDA. Used to use them before I found out they don’t segregate client funds. Oops.

Click to expand...

The tailoring position size is probly the main reason i want to swicth to oanda. I was a bit concerned when you said they dont segregate client funds so i asked them if still continued to do this.

Chat Transcript
info: Please wait for an agent to respond.
info: You are now chatting with 'OANDA'
OANDA: Thank you for choosing OANDA. How may I help you?
david: hi i have a one question do you segregate client funds
OANDA: Yes, clients' funds are held in a separate from OANDA's operation funds.
david: thank you bye

I Guess it's a question of what questions you ask and How you ask them...LOL

Please wait for an agent to respond.
You are now chatting with 'OANDA'
OANDA: Thank you for choosing OANDA. How may I help you?
TB: Does OANDA hold my funds in a segregated account so that in the event of OANDA going bankrupt, my funds would be safe?
OANDA: Yes sir, client funds are held in a segregated account from operational funds. In addition, funds are held in accounts at highly reputable banks such as JPMorgan Chase, UBS, Deutsche Bank, and the Royal Bank of Canada (among others)
TB: Yes, but are they legally segregated? If OANDA went bankrupt, would my funds be safe? I intend to run your response through your Regulatory & Compliance depts as well as the NFA and CFTC so please be sure your response reflects current corporate policy.
OANDA: Thank you, sir.
TB: Are you waiting for me or was that your answer?
OANDA: OANDA is US based company, so there's no way to get CIPF protection at this time, and we unfortunately do not offer segregated accounts.
OANDA: In the unlikely event of an OANDA bankruptcy, all customer funds would be administered by a trustee according to U.S. bankruptcy laws.
TB: So my funds are up the swanny and I join the queue of general creditors if OANDA goes belly up. Is that correct?
OANDA: No, in this unlikely scenario, customers would contact this designated trustee and be entitled to a pro rata distribution of available assets.
OANDA: However, this would not guarantee that you would be able to recover all of your funds.


transcript at at 22:50 CET September 2nd 2009

So i you want to use Oanda don't put in more than you need to and skim off the profits frequently.

Eg if you've got a $25k account but only need $4k for margins then keep the other $21k somewhere else.

Horses for courses...

This pretty much confims my opinions. OANDA is THE place to learn your craft with money saved from tips caddying rich peoples' golf in your year off between school and college.

When you have reached the point where you can acutally trade consistently and profitably then you have to start taking a wider universe of risks more seriously.

What if my broker's server goes down?
What if my broker starts selling money at half the value it was last friday (for a G7 nation too)?
What if my broker goes belly up?
etc.

Personally I was quite surprised to learn that learning to trade was only the begining of my problems.

Cheers,

MP

foredog said:

So i you want to use Oanda don't put in more than you need to and skim off the profits frequently.

Eg if you've got a $25k account but only need $4k for margins then keep the other $21k somewhere else.

Click to expand...

Have you seen the charges for bank wires?!? There's no way I intend to withdraw money on a monthly basis. My money's staying in and it's not coming out any time soon.

Oanda is not that bad. every broker has own '+' and '-'