Price Gap Protection is used to limit slippage for pending orders and is applied when the price of your pending order falls inside a price gap due to volatility or other factors.
Price Gap Protection applies to the following account types: Standard Cent, Standard, Pro, Standard Plus, Raw Spread, and Zero accounts.
- What is Price Gap?
- When is Price Gap Protection applied?
- For which accounts and instrument groups is the Price Gap Protection applicable?
- Range of Gap Level values for common currency pairs
- Examples of Price Gap Protection
What is Price Gap?
Price Gap represents the difference in pips between the requested price of a pending order and the first market price after a gap.
Different trading instruments have different Price Gap value ranges. (Refer to the table below)
When is Price Gap Protection applied?
Price Gap Protection is applied when the requested price specified in your pending order falls within the gap. According to this regulation, if the difference in pips between the first market price (after the gap) and the requested price of your order is equal to or exceeds a certain number of pips (Gap Level) for a particular instrument, your order will be executed at the first market price after the gap. If the difference is less than the Gap Level, your order will be executed at your requested price.
For which accounts and instrument groups is the Price Gap Protection applicable?
Price Gap Protection is applicable for the following instruments:
- all currency pairs with suffix -c (Standard Cent account)
- all currency pairs with suffix -m (Standard account) including Crypto, Energies, Stocks, and Indices.
- all currency pairs with suffix -z (Zero account) including Crypto, Energies, Stocks, and Indices.
- all currency pairs with no suffix (Pro account, Raw Spread, and Standard Plus) Crypto, Energies, Stocks, and Indices.
Range of Gap Level values for some common currency pairs:
|Trading instrument|| Gap Level value range
|XAUUSD||0 - (3 x spread)*|
|BTCUSD||0 - (3 x spread)*|
Gap Level values are dynamic and can vary in the range of the values specified above. Any changes affect new and existing pending orders.
*Spread used is at the time of order execution. Please see Example 2 below.
For Zero trading accounts: XAUUSD has a gap value range of 0-(3 x spread) even though this account features zero spread on most instruments most of the time. Trading accounts that charge transaction costs not only through spread but also through a separate commission operation are subject to a spread-based gap level calculation that uses “real spread” (calculated: spread cost + one-side commission cost = real spread). Real spread is used to evaluate spread-based gap level value. As a result, Pro and Zero account gap levels will be the same as ‘Pro spread cost’, which is equal to ‘Zero spread cost + Zero one-side commission’; so the real spread used for gap level calculation is the same for Pro and Zero accounts. See below for an example of this.
Examples of Price Gap Protection
You place a Buy Stop order for EURUSD at the price 1.30560 under a Pro account. Then, a price gap appears. The last Ask price before the gap was 1.30550, and the first Ask price right after the gap was 1.30620. To determine the price that your Buy Stop order will be executed at, you need to find the difference in pips between the first Ask price after the gap and the price you specified in your order:
(1.30620 - 1.30560) = 0.00060 = 6 pips.
Now, check the table to find the Gap Level value range for the instrument you are trading - in this case EURUSD is between 0-8 pips. Let us assume the Gap Level value calculated at that instant is 8 pips.
Since 6<8, as per the Price Gap Protection, your Buy Stop order will be executed at the price you specified in your order, 1.30560. This means that your order will be executed at a price which is 6 pips more profitable than the current market price.
Imagine you placed a Stop Loss on a Buy XAUUSD order at 1817.635 under a Pro account. A price gap appeared and the last Bid price before the gap was 1817.730, and the first Bid price after the gap was 1814.730. The Ask price at this time is 1815.030.
Spread = (Ask Price - Bid Price) / Pip Size
= (1815.030 - 1814.730) / 0.01
= 30 pips
Therefore, the gap level value range for XAUUSD at the moment will be 0-90 pips.
To find the price that your Buy order will be closed at, you need to check the difference in pips between the first Bid price after the gap and the price you specified in your order:
(1817.635 — 1814.730) / 0.01 = 290.5 pips.
Since 290.5 > 90 (maximum gap level value), as per the Price Gap Protection, your Buy order will be executed at a Stop Loss of 1814.730.
This example applies to gap level calculations for BTCUSD as well.