By Javier David NEW YORK, March 29 (Reuters) - The small investor who thrives on the adrenaline rush of day trading stocks on the Internet has a new outlet for playing the market: online foreign currency trading.
OANDA, a privately held, New York-based firm that provides technology and tools for currency trading, this week launched a Web-based foreign exchange service targeting small and medium-sized investors who want to trade dollars, yen, euros and other currencies.
Chairman and co-founder Richard Olsen told Reuters in an interview that the FXTrade Web site (http://www.fxtrade.oanda.com) was not trying to compete with multi-bank trading systems such as Currenex and the yet-to-be launched Atriax and FX Alliance. "In the past, the FX market has been the exclusive club of guys who trade in the millions (of dollars), but we are opening it up for the lower end," he said. "We are targeting the mass market, which literally has an interest to trade from $1 to $1 million," Olsen said. fxTrade's currency trading platform is aimed at a day trader playing with a few thousand dollars, a small business owner who needs to convert dollars to yen to buy goods in Tokyo, or even a young couple in need of several hundred euros for their Paris honeymoon.
AIMS TO BE THE FX MARKET'S 'E-TRADE' To learn more about fxTrade, visitors to the site can play fxGame, a simulation that uses the same online interface and transaction platform as fxTrade. The game allows players to simulate real market conditions and trading, but without the risk. Olsen said fxTrade offers price transparency, with the trading platform quoting continuous real-time executable pricing, as well as real-time settlement, confirmation and account management. The site offers spot market trades in major currencies such as the euro, <EUR=> the British pound <GBP=> and yen.<JPY=> The company said it may broaden its currency offerings to include emerging market and exotic units, should investor demand prove sufficient. Although fxTrade offers some short- and intermediate-term forecasting tools, the company says the site's appeal lies in in the fact that fxTrade requires no start-up costs, commissions or transaction fees. Rather than collect fixed transaction fees, the company says it aims to make money on price spreads. It said the spreads posted on fxTrade will be competitive with other online trade providers. As such, it hopes to attract the same type of investors who frequent online trading venues such as E-Trade and broker Charles Schwab's Web sites. He said that entities such as FXAll and Atriax did not pose a threat to fxTrade's entry into the marketplace because their customer base was much different. "(FXAll and Atriax) have a different customer base. They literally do not want the guy that trades (only) $10,000," Olsen said. Jeffrey Hunter, OANDA's president, said the platform's longer-term objective would be to offer its services to banks and brokerage houses that do not yet have an on-line FX trading product -- while striving to appeal to retail investors. "Our main goal is that by the end of the year ... we have as a customer at least one existing online brokerage company that does not have foreign currency trading online as a product," he said.
