bid-ask spread


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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

See spread.
References in periodicals archive ?
As bid-ask spread data for NYSE firms are only available beginning in 1993, the sample is restricted to 1993 to 2014 for this analysis.
Another goal for this paper is to compare the performance of five bid-ask spread estimation models in markets with different levels of liquidity.
It is also noticed that in highly asymmetric environments, less informed investors mitigate uncertainty, decreasing the purchase price and/or increasing the selling price of bonds traded (Verrecchia, 2001; Welker, 1995), something which, in turn, reduces the possibility of trading, increasing the difference between supply and demand, and this is reflected in the bid-ask spread (Copeland & Galai, 1983).
The determination of the subscription price was based on the trade weighted average price of the share at Nasdaq OMX Helsinki in March 2017, and the price also fell within the bid-ask spread at the close of trading yesterday.
Measures include size-adjusted cumulative abnormal returns (CARs), bid-ask spread, analyst forecast revision and dispersion as proxies for market reaction.
The Seoul direct market is competitive in terms of spread, and getting more and more competitive in terms of brokerage fees: The bid-ask spread, between 0.
Transaction costs, also known as the bid-ask spread, are the difference between the price market-makers pay the seller of a security and the price at which they sell the security to another buyer.
Therefore, for the present study, we directly treat bid-ask spread as asymmetric information.
420) categorize the bid-ask spread as an explicit cost and Huang (2013, p.
The People's Bank of China said it would scrap controls over the bid-ask spread of dollar-yuan trading.
Specifically, the study seeks to empirically evaluate the impact that mobile technology and IR apps may have on a company's trading volume, stock liquidity, bid-ask spread, and analyst coverage, among others.
Confronted with the potential loss, the liquidity providers may widen the bid-ask spread to avert such loss.