Why they withdraw exactly when you need them
A market maker carries risk: they buy from you without knowing the next move. The bid-ask difference compensates for it, so while risk is ordinary the spread stays tight.
At a news release the risk jumps — price may gap before they can hedge — so they widen the quote or pull it briefly. That is predictable economics rather than conspiracy, and it is the real explanation for the spread widening and the slippage spikes in those seconds.
Cost measured against risk
Execution quality is not a technical detail but a cost line measured in dollars. The same reference account the cost family uses: 0.10 lots of gold at 2,400, where $1 of price is $10 of money, and 1% of a $1,000 account is $10.
On that scale every execution cost is directly comparable with the spread, slippage and swap already published — and the only question that matters is how much of the risk budget it consumes before price moves at all.
A worked example
In a quiet hour a market maker quotes gold 2,400.00 / 2,400.30 — a 30-cent spread costing $3 on 0.10 lots.
Seconds before an inflation release the quote becomes 2,399.20 / 2,401.00 — a $1.80 spread costing $18 on the same size, more than the entire $10 risk budget. Neither your trade nor your size changed; the counterparty's willingness to carry risk did.
Common mistakes with this term
- Assuming a news-time spread is manipulation, when it prices a genuinely higher risk.
- Confusing a market maker with an ECN liquidity provider; the two models differ in where pricing originates.