OANDA Launches Online Currency Trading
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.
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