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Spread widening

  • #1
  • First Post: Sep 17, 2020 11:47am Sep 17, 2020 11:47am
These days I trade the Russell 2000 and nothing else.
I have been trying many brokers out on demo and a trying to find the broker that offers all the criteria I am looking for.
None offer all but I decided on a UK broker as I am in the UK, the leverage is lower that I was looking for but I use a lower LOT to allow for this.

The spread is usually 27 and I use a spreadwidener indicator on my chart to keep an eye on it.
It flicks up to 30 sometimes and back to 27, no problem.

Last night during the FOMC statement the spread widened to 168, no problem, it only lasted about 6 minutes and then back to normal.
This morning at about 7:30am the spread was flicking between 54 and 85, so 2 or 3 times the usual.
I looked on the calendar and there was no red or orange news for hours either side.

I use an EA and have set the max spread to 45, no positions were opened so I did not lose out at all but wondered why the spread was 2-3 times wider and for a number of hours so I emailed customer support.
I got a reply 3 1/2 later saying the spread is normal now, lol. Yes it had gone back to normal by then.

I would have liked an answer as to why the spread had widened this morning just so I know.
The thing is it makes me wary of adding more funds, I only started with 1K and was planning on adding another 9K in the coming weeks.
  • #2
  • Sep 18, 2020 9:18am Sep 18, 2020 9:18am
To follow up,

"I have checked with our technical team.
They advised that the time you are referring to is generally one of the least liquid parts of the day for the stock market as the US market is closed and sleeping, the European stocks have not opened yet and only the Asian markets are working, but about to close soon. To sum up, the reason for the wider spread is low liquidity."

If that is the case I would expect the spread to widen x2 or x3 every morning but this is the first time I have seen it. No widening today, and there was no spread increase on my other 2 live accounts with different brokers.
It certainly did not cause me to miss a trade or cost me anything, I was just curious as to the reason.
  • #3
  • Sep 18, 2020 9:25am Sep 18, 2020 9:25am
Quoting normtold
To follow up, "I have checked with our technical team. They advised that the time you are referring to is generally one of the least liquid parts of the day for the stock market as the US market is closed and sleeping, the European stocks have not opened yet and only the Asian markets are working, but about to close soon. To sum up, the reason for the wider spread is low liquidity." If that is the case I would expect the spread to widen x2 or x3 every morning but this is the first time I have seen it. No widening today, and there was no spread increase...
Exactly as they said, I'd be worried if there was no change in spread, meaning they have a dealing desk and you are directly betting against the broker.

Like you said, you haven't seen this before, so maybe you could look at the tape to see if there was an unusually large order at that time sucking up whatever thin liquidity was there.
  • #4
  • Sep 21, 2020 3:47am Sep 21, 2020 3:47am
This might be possible during the high impact news release events when the market becomes much volatile.
  • #5
  • Sep 23, 2020 3:24am Sep 23, 2020 3:24am
Quoting jollypk
This might be possible during the high impact news release events when the market becomes much volatile.
No, really?
Did you even read my post?

"Last night during the FOMC statement the spread widened to 168, no problem, it only lasted about 6 minutes and then back to normal.
This morning at about 7:30am the spread was flicking between 54 and 85, so 2 or 3 times the usual.
I looked on the calendar and there was no red or orange news for hours either side."

6 days later and this has not occured since.
After reading a few reviews this broker gets a bad name for spread widening and fund withdrawal so I tried to withdraw some profits and it arrived in my bank less than an hour later so I will stick with them for the time being.
  • #6
  • Sep 23, 2020 3:55am Sep 23, 2020 3:55am
Quoting normtold
{quote} No, really? Did you even read my post? "Last night during the FOMC statement the spread widened to 168, no problem, it only lasted about 6 minutes and then back to normal. This morning at about 7:30am the spread was flicking between 54 and 85, so 2 or 3 times the usual. I looked on the calendar and there was no red or orange news for hours either side." 6 days later and this has not occured since. After reading a few reviews this broker gets a bad name for spread widening and fund withdrawal so I tried to withdraw some profits and it arrived...
If you start to notice problems, don't put up with them, switch to a more reputable broker before u get burnt not after
  • #7
  • Sep 23, 2020 5:42am Sep 23, 2020 5:42am
Quoting normtold
These days I trade the Russell 2000 and nothing else. I have been trying many brokers out on demo and a trying to find the broker that offers all the criteria I am looking for. None offer all but I decided on a UK broker as I am in the UK, the leverage is lower that I was looking for but I use a lower LOT to allow for this. The spread is usually 27 and I use a spreadwidener indicator on my chart to keep an eye on it. It flicks up to 30 sometimes and back to 27, no problem. Last night during the FOMC statement the spread widened to 168, no problem,...
Can you mention the broker name here?
Maybe you can try Activtrades and Axitrader UK, they are reliable.
Gambling = 0% skill, 100% luck. Trading = 1% skill, 99% luck.
  • #8
  • Sep 23, 2020 12:55pm Sep 23, 2020 12:55pm
Quoting Trader4818
{quote} If you start to notice problems, don't put up with them, switch to a more reputable broker before u get burnt not after
Yes you are correct. The trouble is finding a more reputable broker.
My biggest fear with any broker is a rogue price spike.
I have had it with Pepperstone (Australia) and they were honest and corrected it.

I am in the UK and would prefer 100:1 leverage but any UK company can only offer 30:1 or 20:1 for indices so I either stick with the UK or find an honest broker in another country.
  • #9
  • Sep 23, 2020 12:57pm Sep 23, 2020 12:57pm
Quoting Shakka
{quote} Can you mention the broker name here? Maybe you can try Activtrades and Axitrader UK, they are reliable.
I do not want to mention the company while I have funds with them.

You mentioned Activtrades and Axitrader UK (both offer the Russell2000 index), do you have experience with either of them?
  • #10
  • Last Post: Dec 2, 2020 2:30am Dec 2, 2020 2:30am
It was meant to happen. If there was no change in the spread, it would have been a matter of concern.
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