Spread Question

Lo. I have a question about how spread works..
Ok say you have NFP come out at 8:30 am.

The current price of a currency is:
116.50 and
116.47

Ok the news comes out and makes the price shoot up and you get a gap.
The way i see that it should work is that the 'gap' should go like this.
116.70 and
116.47

Is that how it works?
does the bottom price go down while the top price goes up?

Hi Coon_70

Darkstar is the man to answer your question, he has a fantastic thread which explains the "Spread" thing. Rather than me risking explaining it wrongly, have a look at this thread and I'm sure all you questions will be answered.

Lyndon

http://www.forexfactory.com/forexfor...ead.php?t=7484

hmm had already read that thread when he posted it.

But i still had this question because i am not 100% on it.
From how i believe it should work the lower price should not move in the Opposite direction.
I understand that the spread widens, and that alot of the time the bottom price sticks close to the top price.

But what i really am looking to find out, is if any of the MM's acctually make the top price go up, and the bottom price go down at the same time.

Oanda is the more popular broker of late who will greatly increase their spreads during news. This is how it will work. 116.50ask 116.47bid become 116.55, 116.42 or something like that. Yes, the bid and the ask both move equal in their directions. Once the spike begins if there is a 10 pip spread, 15 pip spread etc it will just become 116.80ask 116.70 or .65. The reasoning for doing both the bid and the ask before news is that they dont know what side the news will come out. If it came out a sell on USD/JPY, then leaving the spread one sided on the down side would not help them at all.

ok thanks for the help. thats all i wanted to know.
its crap whether it helps them or not.
it should stay at 116.47 as long as people are still buying at that price.