Requote

A requote is a message from a broker indicating that the price at which a trader attempted to execute an order is no longer available, and offering a new, often less favorable, price for the trade.

Quick Definition Box

A requote happens when market conditions change so rapidly that the price you requested is gone by the time your order reaches the broker. Instead of rejecting the order outright, the broker sends back a new price — usually with a wider spread or worse level — and asks if you want to trade at that new price. Requotes are most common with market-maker brokers during news events or low liquidity.

Detailed Explanation

To understand requotes, you first need to grasp how order execution works in retail forex trading. When you click "buy" or "sell" on a trading platform, your order travels from your computer to your broker's server. That journey takes milliseconds. In calm markets, the price you see on your screen is still valid when your order arrives. But in fast-moving markets — like during a major economic data release or a central bank announcement — prices can change dozens of times per second.

A requote is the broker's way of saying: "The price you wanted is gone. Here is the new price. Do you still want to trade?"

The mechanism differs depending on the broker type:

• Market-Maker (Dealing Desk) Brokers: These brokers create an internal market for their clients. When you place a market order, the broker checks its own liquidity pool. If the price has moved, the broker sends a requote with the new price. This is the classic requote scenario.

• STP (Straight Through Processing) Brokers: These brokers pass your order directly to liquidity providers. If the liquidity provider's price changes before the order is filled, the broker may return a requote from the provider. However, many STP brokers offer "no requote" execution by using technology that automatically accepts the new price.

• ECN (Electronic Communication Network) Brokers: These brokers show you the best available prices from multiple liquidity providers. Requotes are rare because the system automatically matches orders to the best available price. However, during extreme volatility, even ECN brokers may experience partial fills or price gaps.

The typical requote scenario involves a market order — an order to buy or sell immediately at the current price. When you place a market order, you are not specifying a price; you are asking for the best available price right now. If that price changes in the milliseconds it takes to process your order, the broker must either reject the order or requote.

Requotes can also occur with limit orders and stop orders, though less frequently. For example, if you set a buy limit at 1.1050 and the market gaps from 1.1048 to 1.1053, your limit order might be triggered at 1.1053 instead of 1.1050 — a form of requote known as "slippage."

Real-World Example

Imagine you are trading EUR/USD. The current bid/ask is 1.1050/1.1052. You see a strong bullish signal and decide to buy 1 standard lot (100,000 units) at market. You click "buy."

Your order travels to your broker's server. In the 50 milliseconds it takes for the order to arrive, a large sell order hits the market, pushing the ask price from 1.1052 to 1.1055.

Your broker receives your order and sees that 1.1052 is no longer available. Instead of filling you at 1.1052 (which would cost the broker money), the broker sends back a requote message:

"Requote: Buy EUR/USD at 1.1055. Accept or Cancel?"

You now have a choice:

• Accept: You buy at 1.1055, paying 3 pips more than you expected.
• Cancel: You abandon the trade.

If you accept, your trade is executed at 1.1055. If you cancel, you miss the move entirely. In either case, the requote cost you time and potentially money.

Now consider the same scenario with a no-requote broker (typically STP or ECN). The broker's system automatically fills you at the next available price — 1.1055 — without asking. This is called slippage, not a requote. The difference is that slippage happens automatically; a requote requires your explicit approval.

Why It Matters for Traders

Requotes matter because they directly affect your trading costs and execution quality. Here are the key implications:

1. Execution Delay: Requotes force you to re-evaluate your trade in real-time. In fast markets, that delay can cause you to miss the move entirely or enter at a worse price.

2. Psychological Impact: Being requoted repeatedly can be frustrating and may lead to impulsive decisions. Some traders accept requotes out of fear of missing out, even when the new price is unfavorable.

3. Strategy Disruption: Scalpers and day traders who rely on precise entry prices are most affected. A 2-pip requote can turn a profitable strategy into a losing one.

4. Cost Comparison: Requotes effectively increase your trading costs. If you are requoted 3 pips on every trade, that adds up quickly — especially for high-frequency traders.

5. Broker Selection: The frequency of requotes is a key differentiator between broker types. Market-makers are more likely to requote during volatile periods, while ECN/STP brokers typically offer faster execution with slippage instead.

Common Misconceptions

Misconception 1: Requotes are always a sign of a bad broker. Fact: Requotes are a natural part of market-making execution. They occur because the broker cannot guarantee a price that no longer exists in the market. However, excessive requotes — especially during normal market conditions — may indicate poor liquidity management or intentional price manipulation.

Misconception 2: Requotes and slippage are the same thing. Fact: They are different. A requote asks for your permission to trade at a new price. Slippage executes your order at the new price automatically. Requotes give you control; slippage does not. Both can result in worse prices, but requotes add a delay.

Misconception 3: ECN brokers never requote. Fact: While rare, requotes can happen on ECN platforms during extreme volatility or when liquidity dries up. The difference is that ECN requotes come from the liquidity provider, not the broker.

Misconception 4: You can avoid requotes by using limit orders. Fact: Limit orders reduce requote risk but do not eliminate it. If the market gaps past your limit price, your order may be filled at a worse price (slippage) or requoted.

Related Terms

• ECN: Electronic Communication Network brokers show multiple liquidity provider prices and typically have fewer requotes.
• STP: Straight Through Processing brokers pass orders directly to liquidity providers, often with no-requote execution.
• Market-Maker: These brokers create an internal market and are most associated with requotes.
• No-Dealing-Desk: A broker model that avoids requotes by routing orders directly to liquidity providers.
• Slippage: The difference between the expected price and the actual execution price, often confused with requotes.

How XM Compares

XM operates as a No-Dealing-Desk (NDD) broker, meaning client orders are routed directly to liquidity providers without intervention from a dealing desk. This structure is designed to minimize requotes. XM offers both Instant Execution (which may result in requotes if the price changes) and Market Execution (which fills orders at the next available price, potentially with slippage but without requotes). Traders should verify current execution policies, including requote handling, on XM's official website, as terms may vary by account type and regulatory jurisdiction.

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⚠️ This glossary entry is educational. Forex and CFD trading carries high risk of loss. Past performance does not guarantee future results. This is not investment advice. Always verify current broker terms and conditions before trading.

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