Requote

What is Requote in forex and CFD trading

A Requote, a term you can find in our forex glossary, is an execution alert displayed by a broker to a trader, typically a market maker, indicating that the price requested for an immediate market order is no longer valid, offering a new, worse price for the execution of the trade. The presence of a Requote matters significantly for real trading decisions because it introduces an execution delay and results in unfavorable slippage, forcing the trader to either accept the new price or cancel the order, compromising the original strategy’s entry or exit point. A trader verifies a Requote when a pop-up window or message appears on the trading platform immediately after clicking the buy or sell button, displaying the new, current bid/ask price and asking for acceptance.

Key facts about Requote

• Mechanism: A Requote is a rejection of a market order due to price volatility, followed by an immediate offer of a new, updated price.
• Trigger: Typically triggered when the price moves beyond a broker’s pre-defined maximum deviation limit, often 1-5 pips, between the time the order is sent and the time it reaches the server.
• Broker Type: Requotes are predominantly associated with market maker (B-book) brokers who control the pricing feed and act as the counterparty.
• Execution Outcome: If the trader accepts the Requote, the order executes at the new, less favorable price; if rejected, the trade does not occur.
• Time Constraint: The new price offered in the Requote is only valid for a very short period, usually 2-5 seconds, before the offer expires.
• Frequency: Requotes are more frequent during periods of high market volatility, such as around major economic news releases.
• MT4/MT5 Setting: On MetaTrader platforms, requotes can often be circumvented by enabling the “Maximum Deviation” setting, instructing the platform to accept minor price shifts.

How Requote works in forex and CFD trading

The Requote mechanism is an internal broker policy used to manage the risk associated with guaranteed execution at the quoted price in a fast-moving market.

The process involves these sequential steps:

1. Trader Submission: A trader clicks “Buy” on EUR/USD at the displayed Ask price of 1.1000 for 1 standard lot.
2. Order Receipt: The order reaches the market maker broker’s server.
3. Price Check: The broker’s internal engine checks the price at the moment of order arrival and determines that the market price has moved up to 1.1002.
4. Deviation Test: The price movement of 2 pips exceeds the broker’s allowable deviation limit of, for example, 1 pip.
5. Requote Generation: The broker rejects the trade at 1.1000 and sends a new offer, the Requote, back to the trader at the current Ask price of 1.1002.
6. Trader Decision: The trader sees the pop-up Requote and must decide within seconds to click “Accept” to buy at 1.1002 or “Cancel” to reject the trade.
7. Final Execution: If accepted, the trade executes at 1.1002, negatively impacting the initial position by 2 pips.

Example of Requote with a real trade

This example illustrates the direct cost and PnL impact of accepting a Requote.

Scenario: A trader attempts to enter a long position on EUR/USD, but the order is requoted.

Intended Entry Type: Buy Market Order
Intended Entry Price: 1.1000
Position size: 1 standard lot (100,000 units)

Requote Execution: Trader attempts to buy at 1.1000. Broker sends a Requote offering the new price of 1.1003. Trader accepts the Requote. Executed Price: 1.1003.

Price difference accepted: 1.1003 – 1.1000 = 3 pips
Numeric Impact: 3 pips × $10/pip (for EUR/USD standard lot) = $30 additional cost incurred by the Requote

Result: 1 standard lot bought at 1.1003, starting the trade $30 further in negative PnL than intended.

How Requote affects your cost and risk

A Requote directly increases the execution cost and introduces timing risk. It forces the trader to execute at a less favorable price than planned, effectively guaranteeing negative slippage on the order.

Requote compared with related concepts

Requote vs Slippage

A Requote is an explicit warning and rejection of the original price, requiring manual trader confirmation before execution, usually resulting in a worse price. Slippage is an automatic execution at a worse or better price than requested, without a warning or manual confirmation, which can occur on market orders even with ECN brokers. Requote involves conscious trader acceptance, while slippage is purely algorithmic execution.

Requote vs Order Rejection

A Requote is a rejection of the original price followed by an immediate counter-offer for execution at a new price. An Order Rejection is a definitive rejection of the order with no counter-offer and no execution, usually due to insufficient margin, trade disablement, or violation of trading conditions. Requote provides an execution opportunity, whereas a rejection provides none.

Broker differences in Requote across the industry

The presence of Requotes is highly correlated with the broker’s underlying execution model and how it handles risk management.

How to verify Requote on your trading platform

Verifying Requote settings is typically done on platforms like MetaTrader 4 (MT4) which commonly employ market maker execution.

1. Open the Order Ticket: In MT4, double-click the currency pair (e.g., EUR/USD) in the Market Watch window to open the order entry screen.
2. Select Instant Execution: Ensure the “Type” field is set to “Market Execution” or “Instant Execution.”
3. Locate Deviation Setting: Look for the “Maximum Deviation” field, often near the volume and stop-loss/take-profit settings.
4. Set Maximum Deviation: Enter a value, such as 3 points (or 0.3 pips for 5-digit brokers), or leave it at 0.
5. Test Without Deviation (0): Place a market order during a volatile time with the deviation set to 0. If the price moves, a Requote pop-up should appear, showing the new price.
6. Test With Deviation (>0): Repeat the action with a deviation value set (e.g., 5 points); the order should execute automatically within that tolerance without a Requote.
7. Sanity check: If a pop-up appears asking for confirmation of a new price, a Requote has been issued; if the trade executes instantly at a worse price, the deviation was accepted or slippage occurred.