There are many factors that go into determining how quotes are calculated, including what kind of trading instrument is being quoted.
Exness is a Market Maker, offering to buy and sell CFD products on trading instruments at openly quoted prices on a long-term basis. Not all Market Makers are the same, and the topic of how they work is in-depth so we recommend reading more about Market Makers here.
The most important thing to remember is that Exness is a technology-driven Market Maker, relying on its own sophisticated market, risk, pricing and execution models to create a digital marketplace. As such, how Exness quotes will reflect this bespoke approach to what Exness does.
When Exness quotes an instrument, the following processes all occur:
A matching engine attempts to match buy orders and sell orders when an order is opened, ideally finding matches based on current supply and demand. Orders that aren’t matched are fulfilled by Exness providing its own liquidity to execute the order.
This is a very important part of the service Exness provides, as matching ensures Exness does not profit off of the trading result of its traders.
Order and pricing
Market activity is the primary influence on what the best bid or ask price is at any moment. Buyers and sellers are constantly placing orders, pending orders, or limit orders and all of these actions dynamically inform pricing. Since the bid and ask prices are constantly changing, so too does the spread.
Though spreads are impacted by many things, volatility and liquidity are key, with spreads becoming a measure of the markets’ uncertainty and risk. The spread is the source of revenue for Exness. Spread is dictated by asynchronous price-data feeds, as well as pricing models that use various mathematical models, trust models, real-time algorithms and adjustments.
Spreads present a delicate balance between Exness and the trader: if the spread is too large, Exness cannot remain competitive as traders try to minimize their market costs while a spread too small means the risks outweigh the reward for Exness to execute orders.
Quotes, slippage and requotes
There are articles on slippage and requotes that go into more detail about these topics, but it’s important to mention that both can impact how quotes are calculated. A millisecond of latency can be the difference between an order that is favorable or unfavorable, as it executes in the trading terminal after a delayed request to the trading data center.
Exness offers a competitive edge to its traders by utilizing price gap protection that can lessen the impact of slippage and requotes on traders.
Execution of orders includes calculating quotes based on matching, market activity, spread costs, and slippage/requotes, all of which include processes designed by Exness to benefit its traders. Ultimately it is the unique Exness execution of orders that overall informs how quotes are calculated.
- Our algorithms are sophisticated enough to create trust models based on analysis of trading account activity.
- We aim to provide the lowest spreads as possible, while executing orders with minimal delays to combat slippage/requotes.
- A sustainable business model is integrally and inherently fair; we are never in competition with our traders because our model is sustainable without conflict.
- We invest in Essential Market Protections like Price Gap Protection, Negative Balance Protection, and other cost-saving features for our traders; to build long-term business relationships.