The calm before the news: why spreads tighten right before a release
Posted: Sat Oct 31, 2026 8:42 pm
Right before a big data release, spreads often look excellent. Quotes are tight, the market is quiet, and an entry looks easy. That calm is misleading.
Liquidity providers frequently pull back or widen quotes a few seconds before the number, but in the minutes before, many participants simply wait. Volume drops, price drifts in a tight range, and spreads can narrow.
The quiet invites entries, especially for traders hoping to catch the first move. The problem is that the stop loss on such a position sits in a market about to become violent, and the spread will widen at the worst moment.
A common practice is going flat several minutes ahead of high impact news, and waiting for spreads to stabilize afterward, often ten to fifteen minutes later.
For those who do trade the release, the rules differ: smaller size, wider stops, and acceptance that fills will be poor.
What is your rule for the minutes before a major release, and has it changed after a painful experience?
Liquidity providers frequently pull back or widen quotes a few seconds before the number, but in the minutes before, many participants simply wait. Volume drops, price drifts in a tight range, and spreads can narrow.
The quiet invites entries, especially for traders hoping to catch the first move. The problem is that the stop loss on such a position sits in a market about to become violent, and the spread will widen at the worst moment.
A common practice is going flat several minutes ahead of high impact news, and waiting for spreads to stabilize afterward, often ten to fifteen minutes later.
For those who do trade the release, the rules differ: smaller size, wider stops, and acceptance that fills will be poor.
What is your rule for the minutes before a major release, and has it changed after a painful experience?