The firm says it will suspend weekend FX dealing indefinitely. Starting Friday July 6, Oanda will stop market-making at 21.00 BST and reopen on Sunday afternoons at approximately 20.00 BST. Tony Savor, chief technology officer at Oanda, says maintaining a market when the international currency markets are closed represents a big challenge to the company.
He says in the absence of live market data, Oanda could still offer a price for each currency pair, but with no active market in which to hedge customer trades, the firm was forced to take on greater risk.
“To mitigate this risk, it was necessary to increase spreads, but this was deemed to be at odds with Oanda’s objective of keeping client costs as low as possible,” says Savor. “Our commitment to providing low spreads was a major consideration in this decision.”
Oanda says the move brings its trading hours in to line with industry standards. Some other retail FX platforms do, however, remain open at weekends.
K Duker, the former Deutsche Bank e-commerce head who took over as Oanda chief executive in May, says when he compares the risk weekend trading represents with the low volumes actually traded, the obvious conclusion is to suspend trading during non-market hours.
“This will also enable Oanda to concentrate additional resources on accommodating the needs of our clients during regular market hours,” he adds.