Requote

A requote is a situation in which the system rejects the execution of a trading order at the price requested by the trader, offering a new price instead due to rapid market changes before execution is completed.

How it occurs: A requote typically arises when an order is submitted during rapid price movement, where the original price is no longer available, giving the trader the choice to either accept the new price or cancel the order.

Importance for traders:

• Understanding it helps anticipate potential execution delays in fast-moving markets.
• It reflects the pricing mechanism and execution model used by the trading platform.
• It is usually associated with dealing desk execution models more than direct market execution systems.

Common mistakes:

• Confusing a requote with slippage, despite the difference in their mechanisms.
• Repeatedly accepting new prices without assessing their cumulative impact on the trading strategy.
• Overlooking their frequent occurrence as an indicator of low liquidity or slow execution.

Requoting decreases significantly in direct execution systems compared to traditional execution models. How it appears on the EVEST platform: EVEST strives to minimize requotes through direct connectivity to multiple liquidity providers. However, they may rarely occur during moments of extreme volatility or thin liquidity, displaying a prompt with the new price and an option to accept or decline before any actual execution takes place.

When it occurs most: The probability increases during the minutes following the release of high-impact economic data, or when executing relatively large orders in instruments with limited liquidity.

Risks: A trader may miss an entry or exit opportunity at their desired price and may be forced to make a split-second decision to accept or reject the new price under high psychological and market pressure.

Additional common mistakes: Some traders confuse requotes with slippage despite their different mechanisms, while others fail to carefully read the new price prompt before automatically accepting it.

Relation to risk management: Traders on EVEST are advised to avoid opening large positions or using direct market orders during sensitive news releases to reduce the likelihood of requotes, and to carefully review every requote prompt before accepting, ensuring that the new price aligns with the trade’s original risk management plan rather than accepting it impulsively.