OANDA Announces Research on Market Volatility to Tighten Spreads

Ricardo Esteves

Ricardo Esteves has seen business and economics through many lenses. He joined the Financial Services Industry in 2009, and has been a financial journalist since 2011. He holds a degree in Business Administration and has experience producing real-time news, from both buy-side and sell-side, as well as for retail traders, brokers and service providers. Esteves' work has appeared in a variety of online publications including FX Street and FinanceFeeds.


OANDA Announces Research on Market Volatility to Tighten Spreads

May 24, 2019

OANDA, the leading retail FX broker, has partnered with the Fields Institute for Research in Mathematical Sciences in order to improve FX volatility predictions, enabling OANDA to better hedge their positions and manage risk, resulting in tighter spreads for clients, especially during critical market events.

In the first phase of the partnership, they examined the relationship between volatility regimes, market events, and changes in volume in order to provide insights into the dynamics of FX volatility and the reaction to known market events, because knowledge of both the emergent patterns and future state of volatility can improve hedge effectiveness, adding value to client offerings

Neil McDonald, OANDA’s Head of Trading, said: “While OANDA has long been committed to tight spreads and transparent pricing, the markets can experience extreme volatility at times, which obviously impacts the prices we quote. As a result, we’re pleased to work with The Fields Institute to identify ways we can better predict market volatility, with a view to enabling us to offer the tightest spreads possible and reduce the cost of trading on our institutional-grade platform, even during major events.”


OANDA will now aim to establish a new Systemic Risk Analytics lab as part of the Institute’s Centre for Quantitative Analysis and Modelling (Fields-CQAM). To that effect, the FX company will further build on their relationship with the Fields Institute, partnering with Matheus Grasselli and Thomas Hurd of McMaster University, and Sebastian Jaimungal of the University of Toronto.

Huaxiong Huang, Director of CQAM, said: “Fields-CQAM collaborates with innovative companies to utilize mathematical research to benefit the private and public sectors. As such, we are pleased that OANDA will join the Fields family and play a significant role in promoting advanced research and training at CQAM.”

In 2018, the shareholders of OANDA Global Corporation announced the sale of all of the outstanding equity of OANDA to a wholly-owned subsidiary of CVC Capital Partners (CVC) Asia Fund IV.

Following the acquisition of OANDA by CVC Capital Partners, CEO Vatsa Narasimha stepped down from the position for personal reasons. although hewill continue to serve in the Board of the Company as a non-executive director.
Most recently, OANDA announced a partnership with commercial insurance software provider AdvantageGo in order to power its Currency Services with OANDA’s Exchange Rates API.

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