A requote occurs when a broker, investment platform, or market maker issues a new price quote that differs from the original quote provided earlier. This happens because market conditions—such as volatility, liquidity changes, or time delays—have shifted the asset's value since the initial quote was generated. When you receive a requote, you have the choice to accept the new terms or cancel the transaction entirely.
How It Works
Here's the typical sequence: You request a price quote for an investment (equity, bond, or other security). The broker provides a quote that's valid for a specific time window, usually seconds to minutes. If you don't execute the trade within that window, or if market conditions shift dramatically, the broker may issue a requote with updated pricing. This new quote reflects the current market reality and gives you updated terms before you commit capital.
Requotes are most common in foreign exchange markets, thinly traded securities, and during periods of high volatility. They protect service providers from the risk of honoring stale prices while maintaining transparency with clients.
Why It Matters for Investors
Understanding requotes helps you manage execution expectations and avoid surprises. In fast-moving markets, prices can shift rapidly. A requote isn't a rejection—it's a reality check that ensures both parties are working with current information. For angel investors trading in secondary markets or executing larger positions, requotes can significantly impact your entry or exit price. Knowing how long quotes remain valid and what triggers a requote helps you make faster decisions.
Example
You're investing in a late-stage startup equity through a secondary marketplace. At 2:00 PM, the platform quotes you $50 per share. You step away to review documents. At 2:15 PM, the company announces new funding, which increases demand for shares. When you return to execute your trade, you receive a requote at $55 per share—reflecting the new market interest. You can either accept $55 or walk away. Without the requote mechanism, the platform would be forced to honor the stale $50 price or reject your order entirely.
Key Takeaways
- A requote is a revised price quote issued when market conditions change between the initial quote and trade execution
- Requotes protect service providers from honoring outdated prices and give you the option to accept or decline new terms
- They're especially common in illiquid assets, foreign exchange, and volatile markets
- Always note the validity period of a quote to avoid unexpected requotes when executing investments