Ultima Markets adopting floating spreads, the spread reflect the actual market conditions. When there is low liquidity or significant market volatility, the spread will widen to reflect these conditions. This is a natural phenomenon as all trades impact market prices, leading to slippage. Here are the reasons that may cause slippage:
- High market volatility: If the market fluctuates significantly within a short period, the trade may not execute at the expected price. In such cases, the trade is closed at the current executable price, which may result in slippage.
- Low liquidity: When there are fewer buy and sell orders in the market, it's hard to find matches for your orders which can cause orders to be filled at prices different from what was expected in low liquidity markets.
- Major news release: Market prices may be more sensitive to the release of political news, economic data, or emergency events, leading to sharp fluctuations that may cause slippage.
