The spot Foreign Exchange market is subject to extreme price volatility. Fast market conditions may be caused by various factors, including but not limited to news releases and/or order imbalances. During extreme price volatility in fast markets, currency pair prices may gap and spreads may widen. A price gap occurs when the price of a currency pair either jumps or plummets from its last bid/offer quote to a new quote, without ever trading at prices in between.
Prior to major economic news releases, eFOREX may restrict the placing of entry orders to a greater number of pips away from market price than the typical five (5). The decision to widen this spread will be based on the prevailing market liquidity and volatility. All data released will be evaluated separately. This change does not prevent the placing of market orders; however, market orders could be subject to a re-quote during fast market conditions. Our actions are designed to reflect current conditions and attempt to protect our Clients from the possibility of extreme gap fills during periods of increased volatility.
The standard industry practice for currency dealers, including dealers on the interbank market, during fast market conditions and price gaps is to set market levels and execute orders without the use of automated systems or services. In such an event, there may be a significant delay in trade execution while rates are cross-referenced. If the market trades through a stop, the stop is reset at the next best tradable price. A specified rate order does not provide a fixed-price guarantee to the counterparty.
eFOREX, like all currency dealers, is a "request for quote" dealer and follows industry standards for fast market conditions. eFOREX Clients who elect to trade during fast market conditions are responsible for losses incurred due to this practice, just as Clients are held responsible during normal trading conditions. eFOREX will not be held liable for any losses due to fast or volatile markets, electronic disruption in service, service delays, incorrect information received from service vendors (e.g. quotations, news services) and/or Clients (e.g. client profile data, updated data).
Disclaimer: Forex trading involves significant risk of loss and is not suitable for everyone.