Wide Spreads in the evening EURGBP

[CharlieB]

[Merly]

That's pretty normal. They say the price is based on the underlying asset, but I'm pretty sure it's stop hunting. Like they run an algorithm that predicts if they widen the spread to 'X' it'll knock out 'Y' amount of stops. Some of them are ridiculous as you say, going one second from less than a pip up to 15+ pips.

I've seen other brokers do it (and others not 😉 ), so always remove your stops or move them well out the way between 10.00pm and 10.30pm UK time.

[CharlieB]

2 hours ago, Merly said:

That's pretty normal. They say the price is based on the underlying asset, but I'm pretty sure it's stop hunting. Like they run an algorithm that predicts if they widen the spread to 'X' it'll knock out 'Y' amount of stops. Some of them are ridiculous as you say, going one second from less than a pip up to 15+ pips.

I've seen other brokers do it (and others not 😉 ), so always remove your stops or move them well out the way between 10.00pm and 10.30pm UK time.

it was very strange - an hour later and we were back to a 2 pip spread - all for no apparent reason.

Why do you say from 10-10.30?  I assumed it was just out of UK hours ie all night.

Removing stops overnight on these seems the only way to avoid being "tagged and dragged".

 

[Merly]

10pm is when it normally starts, whether that's something to do with the underlying market or that's when their stop hunting algo is programmed to start, I don't know. It's normally back to normal by 10.30pm or so, I think it's just to flush out the overnight trades. Just keep your stops wide, or close trades by 10pm if you can.