Why does the spread widen overnight and slippage show up?
Trading costs more in the small hours and on holidays: the spread opens up and slippage bites. The cause is one thing —thin liquidity— and reading it saves you money on every entry.
JUL/5/2026 · 2 min read
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You've probably noticed that a pair with a tiny spread during the day widens at night, and that sometimes your order fills at a worse price than you saw. It isn't your broker playing dirty: it's thin liquidity. This is the practical face of what liquidity is and where it concentrates.
What is the spread and why does it change?
The spread is the gap between the buy and the sell price: what you pay to get in. It isn't fixed. Competition between orders sets it: when many buy and sell orders sit close together, the gap is tiny. When there are few, the space between the best buyer and the best seller widens — and that space is your spread.
Why does thin liquidity widen the spread?
Because with few participants awake, the order book empties out. In the Asian small hours or on a London and New York holiday, fewer players are quoting, so the best bid and the best offer drift apart. The same EUR/USD that shows 0.3 pips at midday can show several overnight. The pair didn't change; how much liquidity holds it up did.
What is slippage and when does it hit you?
Slippage is the difference between the price you asked for and the one your order actually filled at. It happens when, at the instant of your entry, there aren't enough orders at your price and the system fills you with the next available ones — worse. In thin liquidity there are fewer orders to absorb yours, so slippage grows. That's why it bites harder overnight, in the weekend gap, and in the exact second of a strong news release.
How do you avoid overpaying?
Don't trade the dead hours unless your strategy demands it. Trade when the market is full —the liquid sessions— to pay tight spreads and suffer less slippage. And if you must enter in a thin moment, use limit orders instead of market orders: you set the worst price you'll accept and stop yourself being filled far worse.
The spread and slippage aren't bad luck: they're the price of the moment's liquidity. Choosing your hour is, in practice, choosing how much you pay to trade.
