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bid-ask spread |
Also found in: Wikipedia | 0.02 sec. |
Bid-Ask Spread On an exchange, the difference between the highest price a buyer of a security or other asset is willing to pay and the lowest price a seller is willing to offer. Generally speaking, the more liquid an asset is, the lower the bid-ask spread is. As a result, currency, which is considered the most liquid asset, has an extremely low bid-ask spread. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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| McInish and Wood (1992) find that as the trading volume of a stock increases, the bid-ask spread of this stock declines. ``We strongly believe that maintaining our Nasdaq SmallCap Market listing is in the best interest of all shareholders as it provides greater share liquidity by the way of potentially higher trading volumes, lower bid-ask spreads, and a higher number of market makers,'' Ghauri said in a statement. debt securities, we use half the bid-ask spread and rely on estimates of spreads provided by market participants of 5 basis points (BP) on U. |
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