Trading
Bid-Ask Spread
Difference between bid and ask prices
What is Bid-Ask Spread?
Bid-Ask Spread The difference between the bid and ask prices. Tighter spreads indicate more liquid options. Wide spreads increase trading costs.
Complete Definition
The difference between the bid and ask prices. Tighter spreads indicate more liquid options. Wide spreads increase trading costs.
Example
Bid: $2.50, Ask: $2.60. Spread = $0.10 or 4%. This is a reasonably tight spread.
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