We use cookies to enhance your experience like remembering your Time Zone. We have updated our privacy policy please check our Terms&Conditions

Sponsored By

Education

Non-Farm Payrolls: Which brokers could keep it tight?

VIKTOR EPERJESY 
PROFILE:

• Current Job: Head of Business Development at Trade Proofer
• Career: Passionate about forex trading since college. Co-founder of Trade Proofer community. 

View profile at FXStreet

As we all know, forex brokers' information sheets listing "target spreads" are not something traders can rely on when they trade around important economic events, like Non-Farm Payrolls. During these minutes spreads first fall apart and recover slowly afterwards as market calms down. As a courtesy of the TradeProofer community our readers can get a better picture of what has happened recently after the May non-farm payroll announcement. TradeProofer is a forex trader community aspiring to benchmark community members' uploaded quotes and trade executions in order to spot outlier trade executions or requotes. The below chart is based on their community data.



The chart shows how several brokers' EURUSD spreads looked at-around the NFP announcement, time is in GMT. The red line represents the most scrambled situation at 12:32, when aggregated spreads got the widest. The brokers are ordered by their 12:32 spreads, thus tightest brokers are on the left, least competitive brokers are on the right. Apparently, some brokers decided to sit on the bench until situation calmed down.

Limitations apply, however. Commissions are not taken into account so the chart does not reflect overall competitiveness of brokers, but rather an impression on how spread volatility unfolded and how particular brokers handle economic events. Also, a competitive quote doesn’t mean competitive fill price. Slippage due to low liquidity and/or latency is frequent especially around such events.

The next chart shows how EURSD spreads got somewhat wider right before the economic event, how they sky-rocketed right after the announcement and how they consolidated after a couple of minutes at a slightly higher level. The y axis shows the actual aggregated spread of 90+ brokers expressed in percentage of its 12:25 value. In plain English, the peak around 500% means that the monitored 90+ brokers’ spreads got 5x wider at the busiest time.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2023 FOREXSTREET S.L., All rights reserved.