As one of the most established brokers out there, it's understandable to see OANDA fees as a reference when it comes to trading costs.
One of the most important aspects when choosing a broker is fees. It's important to understand that online trading is not a cheap investment, so choosing a broker with affordable fees can actually make a difference to your budgeting plan. Unfortunately, not all brokers with low fees are favorable for traders. One should also make sure that the broker is reliable and offers good protection for the users' funds as well.
Now, if you are looking for a well-balanced broker with affordable fees, you might want to check out OANDA. Founded in 1996, the US-based broker is now one of the most popular brokers that offer high-quality platforms with various features and benefits. In this review, we're going to be focusing on OANDA fees.
Traders looking for brokers with accurate precision, OANDA can be an option. That is because OANDA is a broker that provides quotes with 5-digit accuracy and active price movements that follow market developments. Order execution speed is also faster in this broker.
It provides benefits for novice traders, as they can trade with smaller volumes using the calculation system based on currency value, unlike other brokers adopting the lot system.
Founded in 1996, OANDA was built by Dr. Michael Stumm who is a lecturer in Computer Engineering at the University of Toronto, Canada, along with his colleague, Dr. Richard Olsen of The Olsen Ltd., which is one of the leading econometric research institutes. They have a head office in San Francisco, United States.
OANDA branch offices can be found everywhere. Some of these offices are located in the United Kingdom, Singapore, Japan, and Canada. With this number of offices spread, OANDA has increasingly attracted the attention of clients worldwide.
OANDA's company is registered under several well-known jurisdictions in financial trading. They are regulated by CFTC and NFA in the US, FCA in the UK, ASIC in Australia, and many others. Traders do not need to worry anymore about security when trading in OANDA. However, these advantages make trading rules at OANDA more stringent compared to other brokers.
For example, OANDA only allows maximum leverage of 1:20, because the rules in the US and Japan do not allow leverage above that. Besides, the registration procedure is more complex due to various additional requirements that are not submitted by other forex brokers. On top of that, hedging is not allowed in one trading account as the client must open an additional account to hedge.
Nevertheless, OANDA is known for being a leading broker with many advantages offered. OANDA faces increased market risk during periods of price volatility, such as economic and political news announcements. When market spreads increase or decrease, their pricing engine widens or narrows spreads accordingly. That way, traders can get the latest conditions from price movements in the market more quickly.
Prices move very fast in the market. Especially when news releases have a large impact on market volatility. This condition is often exploited by brokers to take advantage of clients with Requotes. However, traders do not need to worry about additional costs when trading with OANDA.
The company never withdraws Requotes so traders can get maximum profit. When traders are unavailable to monitor open positions, they can set take profit orders to lock in profits and Stop Loss orders to help protect against further losses.
As an experienced and well-known online forex broker, OANDA is committed to maintain an efficient trading environment that reduces latency and provid tools to help clients manage the degree of acceptable slippage.
With a fast & reliable trading platform by OANDA, clients' trades are executed in 0.012 seconds. This suits traders who choose brokers based on execution speed.
Because of this exceptional execution service, it is not surprising that OANDA won many awards, including the winner of the world's Best Retail FX Platform at the prestigious e-FX awards. The broker is also voted number 1 for Consistency of filling trades at quoted prices, Execution speed, and Reliability of platforms.
There is no minimum deposit or minimum balance required to open an OANDA account. Deposit and withdrawal can be done easily. OANDA provides a variety of payment method facilities, including Paypal, Wire Transfer, Credit Card, and Debit. Traders can adjust it to the region where they live.
OANDA provides more than 100 trading instruments, including 71 currency pairs, 16 indices, 8 commodities (Brent Crude Oil, Copper, Corn, Natural Gas, Soybeans, Sugar, etc.), 6 Bonds, and 23 Metals.
The fxTrade and MetaTrader platform are available at OANDA. These platforms can be used for Desktop and Mobile. Another plus is they have an OANDA Technical Analysis that exists in collaboration with a technical analysis provider called Autochartist.
With these platforms, clients can monitor price movements easier and automatically recognize patterns created on charts, as well as receive alerts when the awaited patterns appear. Access to this technology can be enjoyed free of charge.
In conclusion, OANDA is an ideal broker for traders in need of fast execution backed by many years of experience. The company is also a good alternative for those looking for a well-regulated broker with flexible trading and deposit conditions.
Essentially, there are several types of fees that you should be paying attention to in a broker, namely:
- Trading fees: These are the fees that users must pay when trading. The fees can come in various forms, such as commission, spread, or financing rate. The exact amount may vary for each broker.
- Non-Trading fees: These are the fees related to technical operations that users make in their accounts, such as deposit fees, withdrawal fees, or inactivity fees.
What are OANDA Fees?
Compared to traditional brokers, OANDA certainly offers much lower fees because they are better scaled and advanced. Even among other online brokerage firms, OANDA fees are still relatively low in general. As a result, the broker is considered suitable for many types of traders, particularly active users who like to trade frequently like day traders or even scalpers.
OANDA Trading Fees
In general, OANDA offers two pricing options, namely spread-only and core pricing plus commission. This means you can choose to pay the spread with the spread-only option or get lower spreads with commissions with the core pricing plus commission model.
As the name suggests, spread-only pricing would only charge you with spread. The commission is wrapped into the spread, so there won't be any additional cost to worry about. Meanwhile, the core pricing plus commission option offers access to a lower amount of spread, but you need to pay a fixed commission per trade. The total core pricing spreads in OANDA start from as low as 0.0 for EUR/USD, while the commission is around $50 per 1M trade. As for other forex pairs, the minimum spread starts from 0.2 or higher.
It is also worth mentioning that OANDA charges all currency conversions with a 0.5% markup or markdown on the midpoint price at the time of conversion. The currency conversion charge will be applicable when a trade or transaction is conducted in a different currency to the account's home currency, and therefore needs to be converted before use. It also applies to any realized profits and losses as well as any associated adjustments that are conducted in a currency other than the account's home currency.
OANDA Non-Trading Fees
As mentioned before, non-trading fees are fees that are not related to buying and selling assets.
To begin with, OANDA does not charge deposit fees, so you can make deposits free of charge and there is no minimum deposit amount. According to the official website, you can deposit up to $9,000 (or currency equivalent) to your OANDA account. Some of the supported deposit methods are PayPal, bank wire transfer, Skrill, and Neteller among others. The variation may differ from one country to another, as OANDA is a global-operating broker, and thus needs to follow the rules and regulations applied in each jurisdiction. For instance, OANDA allows payments via PayPal through its Singaporean branch but does not offer the option to clients who register with its BVI subsidiary.
Unlike other brokers, OANDA also doesn't charge any withdrawal fees, so you are free to withdraw with a number of different payment methods. This is actually a huge advantage because this means you can withdraw your money at any time without having to worry about paying anything. Keep in mind that withdrawal usually takes a few business days to complete, depending on the payment method you choose.
Despite the absence of deposit and withdrawal fees, OANDA does charge inactivity fees. It refers to a £10 monthly fee that shall be charged to an account that has been inactive or has no trading activity for a period of 12 months. This fee will be charged to inactive accounts on the third last weekday of each month, but please note that the fees will not be charged to accounts that have an open position.
The account will be charged until one of the following conditions is met:
- The user decides to close the account.
- The user resumes trading on the account, in which case the account becomes active.
- The account's balance is reduced to zero.
In summary, trading with OANDA offers relatively low fees compared to other brokers, especially when it comes to deposit and withdrawal fees. However, this alone is not enough to determine whether the broker is ideal for you. There are other aspects to consider before committing to a broker, such as security, trading features, indicators, customer service, and more. Therefore, make sure to take some time and do proper research on the broker before registering.