OANDA could increase its U.S. market share after acquiring from TradeStation about 2000 clients of its foreign exchange centered subsidiary IBFX. TradeStation which is owned by Monex Group Japan is exiting the retail foreign exchange business in the U.S. just over four years after acquiring IBFX for $17 million.
Provided that all clients stick with OANDA after the deal, the company could become the second largest retail foreign exchange dealer in the U.S. with close to $150 million worth of assets. According to CFTC data from December 2015 the company IBFX held $48.8 million of client obligations. This means that the average deposit the 2000 clients of IBFX hold is over $24000.
TradeStation has been deemed as one of the best trading platforms in the industry and a number of clients in the U.S. are using it to trade a multitude of asset classes.
As part of the deal, clients of IBFX are not going to retain access to their existing trading platform which is seen as the main driver behind opening an account with the U.S. retail foreign exchange subsidiary of TradeStation. Instead, clients of IBFX will get access to OANDA’s fxTrade platform.
This condition is likely to cause a number of traders to refuse the transfer of their accounts to OANDA, since they won’t be able to continue using TradeStation. Trading on the accounts of the customers of IBFX will be suspended next Friday, the 4th of March at 12:00 PM Eastern Time. Contingent and pending orders will not be transferred to the new trading accounts at OANDA.
According to data published in the final Finance Magnates Quarterly Report for 2015, the average trading volumes of IBFX were at about $7 billion monthly, which is lower than $9.3 billion in the third quarter of last year.
Looking at the U.S. retail clients profitability report, which is published by Finance Magnates every quarter, 75 per cent of the customers of IBFX are generating losses on their trading activities.
Back in 2014, IBFX sold its MT4 client accounts in the U.S. and Australia to FXCM.