Investing term
What is Spread?
The gap between the best bid and the best ask.
The spread is the gap between the highest price a buyer will pay (the bid) and the lowest a seller will accept (the ask). It's a hidden cost of trading: buy at the ask and immediately sell at the bid, and you've lost the spread. It's tiny for big liquid stocks and wide for thinly traded ones — which is why illiquid securities are quietly expensive to trade.
For example
A bid of $19.95 and ask of $20.05 is a 10-cent spread — the instant cost baked into buying and selling that you never see as a fee.
Spread is taught hands-on in Stage 5 — How Markets Work Globally.
See the lesson →