200 Pip Spreads at Oanda!
February 2, 2007 by Trader Rich
Oanda had an "operator" error this morning and the GBP/USD had spreads in excess of 200. Outrageous! Having open orders at NFP release is crazy. Supposedly Oanda are reversing their mistakes. A trader put a video on youtube that shows the spread was as high as 200.
You can view the video at http://www.youtube.com/watch?v=Z-ixPr8eJgM
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200 pip spreads are highly unusual. I wouldn’t be surprised if this wasn’t a mistake and in fact intentional.
I’ve heard rumors that Oanda has been losing money due to news traders taking advantage of the slow data feed. These traders use the Bloomberg terminal to get news releases, then trade before the spike happens on Oanda. Oanda can’t get the trade to the market so any profits the news traders make is basically a loss for Oanda. At least that’s what I’ve heard.
If that is what is really happening, I don’t mind Oanda doing what it needs to do to protect itself from unnecessarily losing money.
Michael, I agree with you. They have to do what they have to do…. traders are just moving from Oanda to another provider that give them fixed spreads during news trades. This doesn’t change the fact that instead of increased spreads, the order won’t execute do to a requote….
Not only did they have the 200 pip spread, Oanda charts also show a massive downspike which does not appear on any other broker feeds, nice way to hammer a reputation.
Seems like Oanda is slowing but surely hammering their reputation….
I had my Oanda platform open during Non Farm Payroll, and it pretty much just froze up, then keeled over and crashed. Their charts just locked up and then it logged me out. Their charts still aren’t displaying what actually happened during the hours after NFP, and just gapped down (EURUSD) from 1.3020 to 1.2962 Even their website was frozen for five minutes. I wasn’t trying to trade NFP luckily. I guess they were just overwhelmed by news traders…
I posted the fact that the platform locked up and got the usual response from Oandians (is that what they call them)
I said: There is no question that during economic releases, the platform slows down. I don’t necessarily agree with this happening… I feel like with enough bandwidth, servers, routers, etc, Oanda can prevent lag.
Response was: Not when you are trying to process mabey 100,000 orders in 1 second (only Oanda knows the number).
I said: Why should it matter how many orders their processing? That’s where engineering an architecture that scales comes into place. It certainly would take a lot of money but when money is at stake, it would be wise to invest in a backend infrastructure that doesn’t cause front-end hangs… I’ve been in IT for many years and this is just not acceptable in the financial industry. Just because we are retail traders doesn’t mean we shouldn’t demand better.