We're the first broker in the world to publish price sources and spread calculations used to eliminate conflict of interest with our clients.
All prices and quotes are provided by our market maker partners. Anyone can apply to become a Trade8 market maker to quote prices to our traders. This allows a quote market to develop and competition to arise between market makers to provide the best quotes, resulting in a better trading experience. You can learn more about our Market Maker program here.
Below we describe the base quotes provided by Trade8. Market makers quotes must be "better" than those described below for a chance at execution.
For crypto, we source prices from Coinbase Pro, Bitstamp, and Binance (equally weighted). As more crypto markets appear, we may add more crypto price sources in the future.
For forex, we source prices from a variety of brokers and liquidity pools: Oanda, ActiveTick, Thomson Reuters, and more. Prices from these sources are weighed based on liquidity and spread: we assign a higher weight to sources with high liquidity and low spread.
For stocks, we source prices directly from the exchange the stock is traded on (NYSE and Nasdaq).
The spread (difference between the bid and ask prices) for each market is determined automatically, without intervention from Trade8, based on the market's current volatility and liquidity.
At any given time, our systems receive a mid price for a given market from our price sources, then proceed to apply a spread according to the following formula:
Spread(t) = 2 * (ATR(1m, 4)(t) + ATR(1m, 8)(t))
ATR is the market's Average True Range. The spread at time t is equal to the sum of the 1-minute, 4-period ATR at time t and the 1-minute, 8-period ATR at time t.
The ATR is a unique market volatility indicator that reflects the degree of interest or disinterest in a move. Strong moves, in either direction, are often accompanied by large ranges, or large True Ranges.
The spread calculation formula hence simulates the underlying market's real-time liquidity:
When volatility increases, ATR increases, liquidity decreases, and the spread increases.
When volatility decreases, ATR decreases, liquidity increases, and the spread decreases.
The semi-spread (spread divided by 2) for a given market is displayed in real-time in the Market Info panel in your dashboard. The semi-spread is the total cost of entering or closing a position.
Each market has a base spread minimum. You can see those here.
You can chart the historical bid or ask prices by selecting the Chart Source from the top right corner of your Chart panel. By default the chart shows the market mid price.