Thread: question on spread

Hello,

Last night, I noticed that the spreads on some of the currency pairs became negative. I tried buying and selling quickly, back and forth, and made money. Is this a legitimate arbitrage opportunity, or can I get in trouble for doing this? Thanks.

Originally Posted by TraderDan85

Hello,

Last night, I noticed that the spreads on some of the currency pairs became negative. I tried buying and selling quickly, back and forth, and made money. Is this a legitimate arbitrage opportunity, or can I get in trouble for doing this? Thanks.

Hi TraderDan85

When you trade with FXCM, you are trading on feeds that are being provided by multiple top-tier banks and financial institutions. Unfortunately, online trading technology is not perfect and, in rare cases, this feed can be disrupted. This may only last for a moment, but when it does, spreads often become inverted. During these rare occasions, FXCM advises that clients avoid placing At Best orders. While it may be tempting to place a "free trade," keep in mind that the prices are not real and your actual fill may be many pips away from the displayed price. In the event that trades are executed at rates not actually offered by FXCM’s banks and financial institutions, FXCM reserves the right to reverse such trades, as they are not considered valid trades. Keep in mind these instances are usually rare, and by placing Market Range orders or not trading during these moments, traders can avoid the risk associated with the above scenarios.