Additional hold time (AHT)

This practice, commonly found in FX markets, involves an LP intentionally holding a client’s trade request (or offer to deal) within their system for a set duration before executing a price check. During this delay, the LP assesses market conditions and evaluates the current price to determine whether the trade request is beneficial to them. Once the delay ends, the LP decides to either accept or reject the request based on any changes in the market price. This approach can potentially disadvantage clients by exposing them to price movements during the hold, leading to worse execution conditions compared to an immediate response.

Hold time refers to the specific duration for which a trade request is held within the LP’s system before being processed. It is a predetermined interval that allows the LP to analyze price movements. While this practice can protect LPs from volatile price swings, it may increase the risk of slippage for the client if the price changes unfavorably during the hold time.