Economic calendar · Intermediate

Spread Widening and Slippage During News

Two separate charges land at the same moment, they stack, and neither of them appears in a backtest.

Last reviewed 15 September 2026 by the MarketPro research desk · Editorial policy

In short

Spread widening is liquidity providers pulling quotes around a release, which can take EUR/USD from 0.8 pips to 6 or 10 and gold from 30 cents to $2.50. Slippage is a separate cost: the difference between the price you requested and the price you received, because the order book moved while your order was in transit. Both are largest in the first seconds after a release.

What to remember

A 7 pip spread on a 0.5 lot position costs $31 on entry and $31 again on exit, before the trade is right or wrong about anything.
Slippage stacks on top of the spread rather than replacing it. A 13 pip fill difference is another $65 on half a lot.
A stop guarantees execution, not price. A 20 pip stop that fills 34 pips away turns a planned $100 loss into $170.
Brokers raise margin requirements before scheduled events, so a position needing $500 of margin can need $1,500 without price moving at all.

Lesson 8 of 16 in Economic calendar and news

PreviousHow Markets React to News Releases NextThe Risks of Trading the News

Spread widening and slippage are the two charges that appear on your account during a news release, and both are largest at exactly the moment the price move you wanted is largest. They are separate costs, they stack, and neither of them shows up in a backtest.

0.8 pips becomes 7, and what that bills you

EUR/USD quotes a 0.8 pip spread in the London afternoon. In the seconds around a US inflation release it can quote 6 to 10, because liquidity providers pull their quotes rather than risk being filled at a stale price. Gold, which normally quotes 20 to 30 cents, can quote $1.50 to $3.00.

Put money on it. On a 0.5 lot EUR/USD position, one pip is $5. Entering into a 7 pip spread instead of a 0.8 pip one costs an extra $31 on the way in. Exiting into the same conditions costs it again. You are $62 down before the trade has been right or wrong about anything. On a 1 lot gold position, where a dollar of price is $100, a spread that widens from 30 cents to $2.50 is $220 of additional cost on entry alone. The pip calculator will do this for your own instrument and account currency in a few seconds, and it is worth doing before you decide whether news trading is something you want to do at all.

Slippage is a different charge from the spread

The spread is the gap between bid and ask at the moment you look. Slippage is the difference between the price you expected and the price you received, and it happens because the book moved between your order leaving and arriving.

A market order sent at 1.0850 during a normal hour fills at 1.0850 or within a fraction of a pip. The same order sent four seconds after a release can fill at 1.0863, because every resting order at the levels in between was consumed while your instruction was in transit. That is 13 pips of slippage, $65 on half a lot, and it is charged on top of the widened spread rather than instead of it.

Slippage is not always against you. In a fast market it can fill better than requested, and some brokers pass that on. But the distribution is asymmetric during news because everyone is trying to trade in the same direction at once, which is the direction the book is running away from.

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A stop is an instruction, not a price

A standard stop loss becomes a market order when price touches your level. What it then receives is whatever the book offers. In calm conditions the difference is negligible. Through a release it is not.

You are short GBP/USD with a stop 20 pips above entry. The release lands, price gaps through your level without trading at it, and the order fills 34 pips above entry. Your risk was calculated as $100 and the loss is $170. Nothing malfunctioned. A stop guarantees that you exit, not that you exit at the number you typed. Anyone sizing positions on the assumption that a stop caps the loss at exactly the stop distance is using a model that breaks on precisely the days it most needs to hold.

Some brokers offer a guaranteed stop, which does hold the price across a gap, in exchange for a premium or a wider minimum distance. That is a real product with a real cost, and the cost is the honest price of removing gap risk rather than a gimmick.

The rules change before the event, not after

Margin requirements rise. Ahead of elections, referendums and some central bank meetings, brokers cut maximum leverage, sometimes from 30:1 to 10:1 or lower. A position that needed $500 of margin suddenly needs $1,500, and an account that was comfortable becomes a margin call without price moving at all. The margin calculator shows the requirement at each leverage level.
Minimum stop distances widen. Some platforms will refuse a stop closer than a set distance during volatile windows.
Execution mode changes. Instant execution can revert to request-and-confirm, which is a rejection rather than a fill if price has moved.

Cutting the execution bill

Three things reduce this cost materially. Use limit orders rather than market orders where the strategy allows, since a limit will not fill worse than its price, though it may not fill at all. Trade the most liquid instrument that expresses your view, because EUR/USD normalises faster than EUR/NOK by a wide margin. And measure what you are actually paying: log requested price against fill price on every news-adjacent trade for a month, and the number will either justify the activity or end the argument. That log belongs in the same place as the rest of your risk records, because execution quality is a cost line, not a detail.

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Written and reviewed by the MarketPro research desk

MarketPro is a trading-signal and trading-education app operated by Harajuku Holdings LTD (Cyprus). Our signal desk publishes and tracks every trade idea in-app, and every page here is checked against the app's live behaviour before publishing. Last reviewed 15 September 2026. How we produce signals and content · About MarketPro

FAQ

Spread Widening and Slippage During News: questions

Why do spreads widen during news releases?

Because liquidity providers do not know the correct price for a few seconds and will not quote tightly into that uncertainty. They pull or widen their quotes rather than risk being filled at a stale level by someone faster. The effect is mechanical rather than punitive, and it reverses as soon as enough two-way interest returns to the book, typically within fifteen to thirty minutes on major pairs.

Will my stop loss be filled at the exact price during news?

Not reliably. A standard stop becomes a market order when price touches the level, and it then receives whatever the book offers, which during a release can be many pips worse. Guaranteed stop products do hold the exact price across a gap, but they carry a premium or a wider minimum distance, which is the honest cost of removing that risk.

How can I reduce slippage around economic releases?

Use limit orders where the strategy allows, since a limit cannot fill worse than its price even though it may not fill at all. Trade the most liquid instrument that expresses the view, because major pairs normalise far faster than exotic crosses. And either be flat through the first minutes or size the position so that a worse-than-expected fill is survivable rather than material.

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