Question: FX spread was wide like 20 - 30 pips in XM MT4/MT5. Why is that?
It is a common knowledge among traders that variable spreads provided by brokers could wide up in certain situations.
The certain situations are:
- Important news release
- During political uncertainty
- Unexpected events/natural disaster
- The close of the business day(weekends)
The reason of this is because of lack of liquidity in the market or the liquidity providers take actions to widen the spreads in the motive of risk management in case the market volatility gets high.
Most of FX & CFD brokers are just adding mark ups to the spread, so even the brokers can not predict when this happens.
XM strives to offer NDD execution environment for all traders. In case, if you believe your trades were executed unfairly for some reason, please contact XM support team with transaction details.
For more information about Spread and Market Liquidity, please visit XM Official Website.