I’ve been trying to figure out how much weight to give to spread behavior during volatile news events when I’m comparing brokers.
Obviously, spreads widen during major announcements. That’s normal. But how much are we talking? Does a broker that goes from 1.2 pips to 4 pips feel significantly different than one that goes from 1.2 to 6 pips? Or is the difference basically negligible compared to other factors?
Also, I’m wondering if comparing spreads during news should actually change my broker decision. Like, if a broker has excellent spreads 95% of the time but absolutely terrible execution during the last three Fed announcements, should that be a dealbreaker? Or is that something you just accept as part of trading?
What’s interesting to me is how much rebates actually factor into this. If one broker has wider spreads during news but offers better rebates, does that actually balance out? Or is the rebate not enough to offset bad execution when you actually need tight spreads?
I’m trying to understand from your actual experience: does spread behavior during major news events actually make or break a broker for you, or is it just one small piece of the evaluation?
Spread widening during news is normal. What matters is how much and how quickly they tighten back.
Compare this scenario: Broker A goes from 1.2 to 5 pips and stays there for 30 seconds. Broker B goes from 1.2 to 8 pips but tightens back to 2 pips in 5 seconds. Most traders would prefer B despite the wider spike because execution is faster.
Rebates help offset spreads, but only if you calculate it right. If you pay 5 pips extra during news but get a 0.5 pip rebate, you’re actually down 4.5 pips. That adds up fast if you’re trading during volatility.
For most traders, spreads during news shouldn’t be a dealbreaker if other factors are solid. But if you trade during major economic releases regularly, pick a broker that handles volatility well.
This is something I’ve watched closely over several years of trading.
The spread itself matters less than execution consistency. I’ve seen brokers with slightly wider spreads but better execution than competitors with tighter spreads who slip you on entry.
During the last major economic event, I tracked three brokers I use:
- Broker A: spreads went from 1.3 to 7 pips, filled in 400ms
- Broker B: spreads went from 1.2 to 5 pips, filled in 1200ms
- Broker C: spreads stayed at 2.8 pips but stuck for 30 seconds
Broker A was still my best execution that day. The wider spread meant nothing compared to how fast I got filled.
Rebates do help, but calculate it based on your actual trading. If you only trade during normal hours, rebates matter more. If you chase volatility, execution matters more.
I used to focus a lot on spreads, but honestly I’ve learned it matters less than I thought during news.
What actually gets me is when a broker’s spreads widen unpredictably or stay wide way too long. If I know spreads will expand during major announcements, I can plan for that. But if they’re inconsistent about it, that’s frustrating.
The rebate question is interesting though. Yes, they help, but you need to trade enough volume for the rebates to actually make a difference against worse execution.
Execution speed matters more than the actual spread width during news.
Spreads during news are less important than how quickly they tighten back and if you actually get filled. Rebates help but don’t offset bad execution.