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Bid-Ask Spread

Difference between bid and ask prices

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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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By Ryan Silk & Lawrence Polatchek Last reviewed . Methodology is published in full.

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