The orange line shows the ask price, the blue line shows the bid price and the white line shows the mid price. In the minutes preceding the crash, the pound’s bid/ask spread was tight, as is usually the case.
As the pound started to fall, banks began widening the bid/ask spread to protect themselves from the speed of the move. The spread narrowed as sterling started to recover.
Bloomberg: 10.07.2016, 21:33
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