#firstdealofthenewyearAKEEL Spreads widen during news releases due to increased market volatility and uncertainty. Here’s why it happens: 1. Higher Uncertainty News releases, especially major economic reports (like Non-Farm Payrolls, CPI, or interest rate decisions), create uncertainty. Traders react quickly, but market direction can be unpredictable, leading to wider spreads. 2. Lower Liquidity Market makers and liquidity providers often pull back during news events to avoid taking on excessive risk. With fewer participants willing to take the opposite side of a trade, spreads naturally widen. 3. Rapid Price Movements Prices can jump within milliseconds, making it harder for brokers to execute trades at stable bid/ask prices. To compensate for this instability, spreads are widened to manage risk. 4. Increased Trading Volume While volatility increases, so does trading volume. If liquidity providers can’t keep up with the influx of orders, they widen spreads to balance supply and demand. 5. Broker Risk Management Brokers widen spreads to protect themselves from slippage and sudden price gaps that could result in losses if orders are filled at unfavorable prices. How to Manage Wider Spreads During News Releases Avoid trading right before or immediately after a major news release. Use limit orders instead of market orders to control execution price. Check your broker's policy on news trading—some widen spreads more aggressively than others. Would you like to discuss strategies to trade news events effectively? #firstdealofthenewyearAKEEL