Why the spread at 5pm New York is a different animal than a news spread

[Shadow Trader]

Rollover spreads get lumped in with news spreads, but they behave differently. A news spread widens because liquidity providers pull quotes out of fear. The rollover spread widens because the banks are literally between value dates, and the pricing engines are being reset, swap points rolled, and credit lines refreshed.

The result is that quotes can be wide, stale, and weirdly sticky. A pair showing 0.2 pips all day can sit at 8 or 12 for several minutes, then snap back without any price movement at all. Nothing happened in the market. The plumbing just got busy.

That matters because a scalping stop sitting 3 pips away can get tagged by spread alone. The bid never traded there on an interbank basis, but the broker's feed printed it, and the platform doesn't care about the distinction.

Some brokers hide this better than others. A few widen gradually, which at least gives a warning. Others jump straight from tight to ridiculous within a single tick.

Anyone holding positions through that window is basically donating spread to the broker, win or lose. Flat before the window and flat after is the boring answer, but the more interesting question is what the window actually looks like on each platform.

Here is a rough checklist of what tends to differ between brokers during that window. First, the start time: some widen five minutes before 5pm New York, some right at the hour. Second, the peak width, which can range from 3 pips to 40 on the same pair. Third, the recovery speed. A feed that goes back to normal within two minutes is built differently than one that needs twelve. Fourth, whether the platform keeps accepting orders at all. A few brokers reject new market orders for a short stretch, while others fill them at remarkable prices.

None of those four details appear in marketing material, but they all show up in a simple spread log kept for a week.

What does the rollover spread look like on the broker you use, and how many minutes does it take to normalize?