Understanding Floating Spreads & Why They Suddenly Change
Hello everyone,
Lately I’ve noticed there’s still a very common misunderstanding among newer traders regarding spreads, especially during news events, rollover hours or volatile sessions.
A lot of clients assume spreads are always “fixed” because under normal market conditions they appear stable most of the time. But in reality, many brokers operate using floating spreads, meaning the spread constantly fluctuates depending on liquidity, volatility and pricing from liquidity providers.
For example:EUR/USD might normally show around 0.8–1.2 pips during liquid London/New York sessions, but during major CPI/FOMC releases or lower liquidity periods, it can temporarily widen much more even if the chart itself doesn’t look extremely volatile yet.
I think this is where many misunderstandings happen:
Traders see their Stop Loss triggered unexpectedlyExecution suddenly feels differentSpreads widen during rolloverPeople think the broker is manipulating priceWhen often it’s actually a liquidity and market structure issue underneath.
Still learning about this topic myself, but I’m curious how other traders here evaluate brokers when it comes to:
Floating vs fixed spreadsExecution quality during volatilityLiquidity Provider depth/liquiditySlippage behavior around newsWould genuinely love to hear different experiences because I think this is one of the less understood parts of trading for many retail traders.