OANDA’s masterstroke: Onboarding some of America’s most loyal customers as TradeStation legacy held in high esteem

It is more than fair to say that technology-led electronic trading company OANDA Corporation implemented more than a modicum of business acumen when acquiring the approximately 2,000 retail traders in North America that were using the TradeStation platform.

OANDA Corporation’s acquisition of such a loyal and experienced client base in a domestic market in which OANDA Corporation is a tour de force is a combination which will very likely prove shrewd and cost effective for the company whilst providing a discerning client base with a comprehensive platform. Very clever indeed.

TradeStation, based in the Fort Lauderdale suburb of Plantation, Florida, is a proprietary platform which is owned and operated by IBFX, MONEX Group’s North American subsidiary. IBFX  was banned from operating in the United States last week as a result of a series of capital adequacy deficiencies and administrative matters signaling the end of the road for FX traders on TradeStation.

Just two weeks before IBFX was permanently banned from membership of the NFA, OANDA Corporation onboarded the entirety of IBFX’s TradeStation clients and provided them with a comprehensive method of migrating from the TradeStation platform to OANDA Corporation’s proprietary fxTrade system.

Looking beyond the acquisition of a domestic client base with a penchant for a renowned platform, OANDA Corporation has gained a loyal client base. Often, traders with a preference for proprietary platforms choose them for a specific reason and are less likely to go from broker to broker, as with traders using third party platforms such as MetaTrader 4.

One of the most important factors, however, is the caliber of the clients, who demanded a very high quality platform. It is at this point where the operational maladies which plagued IBFX should be separated from the hewn-from-granite trading experience of the TradeStation platform which now no longer offers FX trading, and is firmly in the ballpark of E*TRADE, Charles Schwab and Scottrade with electronic futures, stocks and equities.

Today, TradeStation has been awarded an accolade by Barrons magazine.

Indeed, industry awards are usually absolutely not worthy of any news report, and are of very little merit, however this particular case shows that TradeStation was indeed a very good tool for retaining good quality traders and that is of value to a brokerage.

In this case, Barrons magazine has awarded TradeStation 4 ½ stars for “Best for Frequent Traders” for the sixth consecutive year in Barron’s magazine’s annual review of online brokerage firms, now in its twenty-first year.

TradeStation was also rated among the top brokers for international traders and for options traders, earning 4 stars in the categories of “Best for International Traders” and “Best for Options Traders,” respectively.

Of TradeStation’s award-winning trading technology, Barron’s wrote, “This is a powerful and extremely customizable platform intended for the frequent trader.”

Last week, FinanceFeeds spoke to OANDA Corporation’s Chief Marketing Officer Drew Izzo in San Francisco, California. In that conversation, FinanceFeeds highlighted how it is very much a considered move to purchase a client base of traders who are loyal to a proprietary platform for many reasons, including the long term viability of maintaining them as customers, however so familiar are they with TradeStation, that a special migratory policy could need to be adopted.

Mr. Izzo explained “TradeStation Forex accountholders were accustomed to top technology and a broker that puts them first, which is precisely what they are finding as they start on the OANDA platform.”

“As part of making the transition smooth for these traders, on March 5 OANDA began offering TradeStation Forex accountholders who transfer to the OANDA platform complimentary access to the TradeStation Forex platform. They can use the TradeStation Forex platform for their research and analysis with trade orders being executed using one of OANDA’s platforms” – Drew Izzo, CMO, OANDA Corporation.

“Additionally, OANDA will offer select elite traders who transfer their accounts free introductory access to OANDA advanced charting services. These traders are already seeing that TradeStation Group chose OANDA as a partner in this deal due to the commitment OANDA has to customer service and the legacy of offering a platform with cutting edge technology” concluded Mr. Izzo.

This type of consolidation within the industry represents some of the largest firms in the US, IBFX having had significant presence until it sold its MetaTrader 4 client base to FXCM in September 2014.

It is highly likely that due to the high quality nature of the client base acquired by OANDA, and the company’s technology-focused ethos, this will represent a long-term consolidation. The question is, will the retail FX industry continue to consolidate in this fashion and follow that of America’s banks which have condensed from 37 in 1990 to just four today?

Photograph: San Francisco, California. Home of OANDA Corporation’s R&D operations.