A requote occurs when a broker offers a new price to a trader after they have attempted to execute a trade at a previously displayed price. This usually happens in fast-moving markets or during significant price fluctuations. Essentially, the broker cannot fulfill the original price request, and instead, a new price is presented to the trader, who must then confirm if they wish to proceed with the trade at the updated price.
Requotes often occur when there is a delay between when the trader clicks to execute a trade and when the broker’s system receives and processes the order. In fast-moving or volatile markets, prices can change rapidly, which is why the broker cannot always execute the trade at the requested price.
Scenario 1: Buying EUR/USD
Initial Price: EUR/USD is at 1.1250/1.1252 (bid/ask).
The trader wants to buy at 1.1252.
New Price: By the time the order reaches the broker, the price has moved to 1.1255/1.1257.
The broker sends a requote with the new ask price of 1.1257.
The trader must decide whether to accept the new price (1.1257) or cancel the trade.
Scenario 2: Selling GBP/JPY
Initial Price: The trader wants to sell GBP/JPY at 145.80.
The market quickly moves to 145.75/145.78.
The broker issues a requote with the new bid price of 145.75.
The trader can either accept the new price and sell at 145.75 or cancel the order.
Scenario 3: High Volatility
Initial Price: A trader attempts to buy a stock at $50.00.
Due to high volatility (e.g., after a news announcement), the price jumps to $50.50.
The broker requotes the trade at the new price of $50.50.
The trader can accept the new price and proceed with the purchase at $50.50.
A requote is a common occurrence in fast-moving markets, especially when there is high volatility or sudden price changes. Traders must understand that requotes are part of the trading environment, and they should be prepared to make quick decisions on whether to accept the new price or cancel the trade.