OANDA Picks Up US Client Assets in April, Increasing Market Share

The 5% monthly increase for OANDA comes about a month after the announcement of a raw spreads offering.

OANDA has picked up client assets in the US, the latest release of CFTC data on retail foreign exchange brokers shows. Customers increased their deposits with the broker by over 5 percent or about $8 million just a month after the company announced a beta launch of its raw spreads product in the US.

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During the same period, GAIN Capital lost about 2.6 percent of client assets, translating into a decline of $7 million. Interactive Brokers and TD Ameritrade have registered a flat month with their clients retaining more or less the same exposure to foreign exchange products.

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The CFTC’s report shows total figures coming out around flat. The total number of retail foreign exchange obligations of brokers in the US increased by $1 million to a total of $524.7 million. The figure is still close to all time lows that were registered last year before the US presidential election rekindled interest in the asset class on part of retail investors.

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Harsh regulatory requirements have dramatically limited the availability of options for retail foreign exchange traders in the US. Currently GAIN Capital and OANDA are the only two companies exclusively dedicated to FX for retail clients in the US.

Raw Spreads Importance for High-Value Clients

US Market Share
US market share of retail foreign exchange client assets as of the end of April 2017

OANDA’s move to start a raw spreads offering with a $10,000 minimum deposit might have played a significant role in the reinvigoration of the broker’s retail forex obligations metrics. The brokerage is filling a gap left in the aftermath of the exit of FXCM from the US market.

Despite the relatively high minimum deposit requirement, OANDA could be starting a new chapter for the retail FX market in the US with its rather competitive offering of raw spreads. Direct market access has been widely demanded by higher net worth clients of foreign exchange brokers worldwide.

Looking at the market share chart for April 2017, OANDA has gained a percentage point to hold 32 percent of all client assets, while GAIN Capital sheds 1 percent for a total of 51 percent.

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