Learn / Glossary / Bid ask spread
GlossaryWhat is Bid ask spread?
The spread is the small gap between what buyers offer and what sellers ask.
The simple explanation
The bid is the highest price a buyer will pay and the ask is the lowest price a seller will accept. Popular stocks have tiny spreads. Rarely traded ones have wider spreads, which makes them costlier to trade.
An example
Buyers bid 99.98 dollars and sellers ask 100.02 dollars. The spread is 4 cents.
Why it matters
A wide spread is a hidden cost when you buy or sell.
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Educational information, not financial advice.