Spread increase due to end of the month?
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Thread: Spread increase due to end of the month?

  1. #1
    I am with tickmill and saw spreads grow two times over. It was 0.1 now it is 0.3 on eur/usd. I saw details from brokers and they had increases since yesterday. Is it possible it is the end of the month and that the spread increased?

  2. #2
    What your point? Ecn average 0.0-0.5 point still ok for me..depend the commision for different broker..the significant is slippage..that the most common ecn trader would confront it. Disperse its concerning the liquidity at that current market. .

  3. #3
    A 0.3 distribute on EUR/USD is not bad. That's normal, if you mean that happened on Friday on overdue afternoon or just before closing. There's not any explanation as to why spreads should grow at the end of the month. It has to do with day and liquidity of the week.

  4. #4
    Quote Originally Posted by ;
    I am with tickmill and saw spreads increase two times over. It had been 0.1 now it's 0.3 on eur/usd. I saw details from brokers and they had increases since yesterday. Is it possible it's that's why the spread increased and the end of the month?
    When it had been end of week(friday evening) than it is okay.

  5. #5
    Quote Originally Posted by ;
    I am with tickmill and watched spreads increase 2 times over. It had been 0.1 now it is 0.3 on eur/usd. I saw details from other brokers and they had increases since yesterday. Is it possible it is the end of the month and that is why the spread increased?
    From theoretical point of view that this doesn't make sense. Spreads widen when risk of being market-maker raises (i.e. market aggressively becomes too bullish or bearish) or if the liquidity is lean. There's not any proof that something of cited above happens at the end of monthly.
    However, will do extra research on that because you raised interesting stage.

  6. #6
    After two times the spreads returned to normal. To the low normal.

  7. #7
    Quote Originally Posted by ;
    quote From theoretical point of view that this doesn't make sense. Spreads extend when risk of being market-maker raises (i.e. market aggressively becomes overly bullish or bearish) or when the liquidity is lean. There is no evidence that something of cited above occurs at the end of a month. But will do research since you increased interesting stage.
    Your first sentence is not right - obviously your theoretical version of the mark does NOT match behavior of the real market.

    Your next sentence is correct. Thus... ask yourself a question: what would make a retail broker to increase spread in the end of the month? What they are afraid of? What they expect to happen at the time and try to insulate themselves from?

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