Continuing the trend of forex brokers trying to diversify their offering to clients OANDA is becoming the latest broker to start offering CFD trading.
Many brokers are now trying to see whether CFDs present lucrative enough opportunity for them to enter this market. CFD market is not that big however and is mainly popular in United Kingdom and Australia with IG Markets being by far the largest CFD broker.
CFD trading is illegal in the United States. FXCM is one of the largest forex brokers now offering CFD trading via its UK based firm (just like OANDA is doing here) using ODL’s presence. In 2011 CFD trading generated 11% of FXCM’s total trading volume representing around $30 billion a month.
Leading foreign exchange dealer provides European traders the opportunity to trade indices and commodities derivatives
LONDON, March 19, 2012 — OANDA Corporation, provider of innovative online foreign exchange trading, has added contracts for difference (CFD) instruments to its award-winning trading platform.
CFDs are derivatives based on an underlying index or commodity. Among the new CFD instruments being offered on the OANDA fxTrade trading platform are index CFDs providing trading access to the Wall Street 30, US Nas 100, US SPX 500, UK 100, Germany 30, Hong Kong 33, and Japan 225; as well as commodity CFDs for crude oil, corn, and wheat.
CFDs allow traders to diversify their investment portfolios or hedge current holdings to better manage overall market exposure. Traders use CFDs to take long or short positions to potentially benefit from market movements in either direction. OANDA clients enjoy fast, reliable execution, flexible trade sizes, full transparency and a market leading web-based and mobile trading platform.
“OANDA has a reputation for innovation; our customers choose us because they value the competitive spreads, quality of execution, and trading experience enabled by our technology,” said Michael Stumm, CEO of OANDA Corporation. “By bringing OANDA innovation to CFD trading, we aim to disrupt this market the way we disrupted the forex market – with fair, transparent pricing, immediate trade settlement, real-time interest rate calculation on balances and open positions, and more.”
OANDA has made CFD trading available to its European clients first, with a plan to roll it out to customers in other regions later this year.
“We are delighted to be the first OANDA division to offer this exciting addition to our product range,” said Antony Broadbent, Managing Director of OANDA Europe Limited. “CFDs play an important role in European trading strategies and we expect our clients to welcome the opportunity to trade this asset class on OANDA’s proven platform.”
not so surprising… rbs was using oanda technology to deal cfds before . spreads are going to be nasty though