Bid-Ask Price Help

Fergi

Recruit
Messages
9
Hi Everyone

Total Noob here just trying to better understand a few things. I've did some reading to try and find and answer but all the different terms for certain happenings can be a bit overwhelming. Came across this platform so decided to screen recorded the issue at hand and ask for help.

I've noticed that my bid / ask price on AUXUSD and T100.Imax is never consistent in the spreads . Almost always tight when in profit and wide when in loss. Is this what is know as Floating Spread?

Thank you kindly
 

bigdolly

2nd Lieutenant
Messages
1,027
Hi Everyone

Total Noob here just trying to better understand a few things. I've did some reading to try and find and answer but all the different terms for certain happenings can be a bit overwhelming. Came across this platform so decided to screen recorded the issue at hand and ask for help.

I've noticed that my bid / ask price on AUXUSD and T100.Imax is never consistent in the spreads . Almost always tight when in profit and wide when in loss. Is this what is know as Floating Spread?

Thank you kindly
Spread is a kind of a tool for a market maker (liquidity provider). When the crowd goes excessively on one of the side (all rush to sell or all rush to buy) it is a risk for the market maker to remain on the wrong side of the market (accumulate wrong inventory - which price continues to depreciate). To deter traders from piling into this direction the market maker increases transaction costs - lowers bid when all rush to sell or hikes ask price when all rush to buy. Both decisions widens bid/ask spreads.

Bid/ask spreads depends heavily on current supply and demand, order book, etc.
 

richardmarcus1509

Private, 1st Class
Messages
41
When the crowd goes excessively on one of the side it is a risk for the market maker to remain on the wrong side of the market .Bid is the buy and ask is the sell price.
 

perryjohn765

Private, 1st Class
Messages
60
Not sure if you i have noticed it but yes the spreads might widen depending on the liquidity and volatility in the market. if you think your spreads widen during the losses, get the logs checked from your broker.
 

Fergi

Recruit
Messages
9
Not sure if you i have noticed it but yes the spreads might widen depending on the liquidity and volatility in the market. if you think your spreads widen during the losses, get the logs checked from your broker.
Thank you, definitely wider when in loss which is one issue amongst a few. Just not sure what is worth enquiring on and don't want to flood this page with issues to come across as a "difficult" user
 
Top