I’ve noticed that during high-volatility news events, HFM spreads widen significantly. It’s frustrating because I might catch a good trade movement but the widened spread eats into my profits. I know rebates help offset costs, but I’m trying to understand how much they actually cushion the impact when spreads go from normal to wide.
Can anyone share their experience? If an event causes spreads to widen by 2-3 pips, do rebates actually make a meaningful dent in that loss? Or am I overthinking this and should just accept wider spreads as part of news trading?
How do you calculate whether rebates are even worth counting on during volatile periods?
Rebates help, but they’re a minor factor during volatility spikes. Here’s the reality: if a spread widens from 1.2 pips to 3.5 pips on EUR/USD during news, you’ve lost 2.3 pips per lot. A typical GlobeGain rebate might give back 0.4-0.6 pips on that same lot. That’s only recovering about 20-25% of the extra cost.
The real edge during news is entry and exit timing, not rebates. Rebates help smooth out the base cost of normal trading. During volatility, focus on reducing your position size or avoiding the news window entirely. Rebates won’t save you if spreads explode.
I trade news events regularly and I’ve looked at this exact math.
Spreads definitely widen during FOMC and other major events. My average spread is around 1.5 pips normally, but it jumps to 3-4 pips during the first few minutes of news release.
Rebates I get from GlobeGain average about 0.3-0.5 pips per lot monthly. So during a news event, the rebate helps but it’s not enough to offset the wider spread. What actually saves me is either scaling down position size or not trading the first few minutes of the release and waiting for spreads to normalize.
I count rebates as a steady monthly cost reduction, not as a hedge against volatility. They’re not the same thing.
Rebates help a bit but spreads still hurt more during news. Reduce position size instead.
Rebates cover maybe 20% of volatility spread increase.
Don’t rely on rebates during volatile periods.