| Dictionary, Encyclopedia and Thesaurus - The Free Dictionary 1,885,192,967 visitors served. |
|
Dictionary/ thesaurus | Medical dictionary | Legal dictionary | Financial dictionary | Acronyms | Idioms | Encyclopedia | Wikipedia encyclopedia | ? |
Bid-Ask Spread |
Also found in: Wikipedia | 0.01 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. Bid-Ask Spread What Does Bid-Ask Spread Mean? The amount by which the ask price exceeds the bid price. Essentially, it is the difference between the highest price a buyer is willing to pay for an asset and the lowest price for which a seller is willing to sell it. Investopedia explains Bid-Ask Spread As an example, if the bid price is $20 and the ask price is $21, the bid-ask spread is $1. The size of the spread from one asset to another will vary with the liquidity of the asset. For example, currency is considered the most liquid asset in the world; thus, currency spreads are very narrow (one-hundredth of a percent). In contrast, less liquid assets such as a small-cap stock will have wider spreads, sometimes as high as 1 to 2% of the asset's value. Related Terms: 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. |
|
| ? Mentioned in | ? References in periodicals archive | ||
|---|---|---|---|
| Whilst PLUS gives us the national recognition and access to critical mass, the order driven systems used by investbx reduce the impact of market makers and removes the bid-offer spread. Volatility and uncertainty tend to widen the bid-offer spread, and make tradingin and out more costly, but that, rather than an increase in tracking error, isthe major risk for investors. Clients can bet directly against each other with no bid-offer spread that characterises traditional operations. |
| Financial Dictionary |
| Free Tools: |
For surfers:
Free toolbar & extensions |
Word of the Day |
Help
For webmasters: Free content | Linking | Lookup box | Double-click lookup | Partner with us |
|---|