This is from Oanda website:
“In keeping with our core principle of fairness, our client trade execution is fully automated. Spreads are generated algorithmically with [B]no dealing desk intervention[/B] or asymmetrical price slippage practices.”
My question is:
If Oanda is a market maker, how can there be no dealing desk intervention? I thought dealing desk is pretty much synonymous with market maker. There must be something I don’t understand.
Dealing desk is a feature that matches client orders. Market maker is an execution venue which is affiliated with the broker you trade (i.e. where you get conflict of interest)
None of big brokers use dealing desks I think because it can be detected and they can get fined by regulators.
Dealing desk is pretty much the same as a market maker in regards to forex brokers. A market maker will take the other side of your trades so it is in there best interest for you to lose money. Thats why there is a conflict of interest. With a dealing desk they will decide if they want to take the other side of your trade or pass it on according there there risk. No dealing desk is more where they pair you trade with someone else meaning say we both use oanda and I want to go short and you want to go long at the same time. They just pair off the trades or they dont intervene. This only works with brokers that have a lot of clients such as Oanda or FXCM since they need the liquidity to be able to offset everyones trades. Then the trade they could not pair up with another customer then they might take the other side of the trade themselves or jumble it up and pass it along to the market.
Thanks for the replies! That really helped!