spread


Also found in: Dictionary, Thesaurus, Medical, Legal, Acronyms, Idioms, Encyclopedia, Wikipedia.
Related to spread: Spread option

Spread

(1) The gap between bid and ask prices of a stock or other security. (2) The simultaneous purchase and sale of separate futures or options contracts for the same commodity for delivery in different months. Also known as a straddle. (3) Difference between the price at which an underwriter buys an issue from a firm and the price at which the underwriter sells it to the public. (4) The price an issuer pays above a benchmark fixed-income yield to borrow money.

Spread

The difference between two prices. For example, if one sells an asset for a higher price than one bought it, this profit is called a spread. It may also refer to the difference between the highest bid and the lowest offer for a security. See also: Bid-ask spread, Arbitrage, Spread option.

spread

1. A position taken in two or more options or futures contracts to profit through a change in the relative price relationships. Purchasing an option to expire in October and selling an option on the same asset expiring three months earlier is one example of a spread.
2. The difference in price between two futures contracts that are identical except for delivery date.
3. The difference between the bid and ask prices for a particular security. A large spread often indicates inactive trading of the security. Also called markup. See also effective spread, gross spread, narrow the spread.
4. The difference in yields between two fixed-income securities. See also basis point.

Spread.

In the most general sense, a spread is the difference between two similar measures. In the stock market, for example, the spread is the difference between the highest price bid and the lowest price asked.

With fixed-income securities, such as bonds, the spread is the difference between the yields on securities having the same investment grade but different maturity dates. For example, if the yield on a long-term Treasury bond is 6%, and the yield on a Treasury bill is 4%, the spread is 2%.

The spread may also be the difference in yields on securities that have the same maturity date but are of different investment quality. For example, there is a 3% spread between a high-yield bond paying 9% and a Treasury bond paying 6% that both come due on the same date.

The term also refers to the price difference between two different derivatives of the same class.

For instance, there is typically a spread between the price of the October wheat futures contract and the January wheat futures contract. Part of that spread is known as the cost of carry. However, the spread widens and narrows, caused by changes in the market -- in this case the wheat market.

spread

the difference between the bid (buy) and offer (sell) price of a FINANCIAL SECURITY, FOREIGN CURRENCY or COMMODITY quoted by a MARKET MAKER or dealer. See BID PRICE.

spread

see BID PRICE.

spread

(1) The difference between the asking price and an offer. For example, if the seller was asking $1.5 million but the offer was only $1.2 million, the spread would be $300,000. (2) The difference between the cost of money and the earning rates.

Example: A mortgage banker is able to borrow money at 7 percent interest because of its excellent credit and high net worth. It then loans that money out on moderately risky ventures at 15 percent interest. The spread is 8 percent.

References in classic literature ?
And putting both constitutions together, you will say that it was not the Romans that spread upon the world, but it was the world that spread upon the Romans; and that was the sure way of greatness.
In a quarter of an hour the news that a gentleman who was a temporary visitor to the town had been stabbed in his bed, spread through every street and villa of the popular watering-place.
Behind Notre-Dame, the cloister and its Gothic galleries spread out towards the north; on the south, the half-Roman palace of the bishop; on the east, the desert point of the Terrain.
The ground of the University was hilly; Mount Sainte- Geneviève formed an enormous mound to the south; and it was a sight to see from the summit of Notre-Dame how that throng of narrow and tortuous streets (to-day the Latin Quarter), those bunches of houses which, spread out in every direction from the top of this eminence, precipitated themselves in disorder, and almost perpendicularly down its flanks, nearly to the water's edge, having the air, some of falling, others of clambering up again, and all of holding to one another.
With his head bent, and his big feet spread apart, he began explaining his reasons for thinking the abbe's plan chimerical.
Tip now lifted both hands above his head, with all the fingers and thumbs spread out, and cried in a loud voice: "Peaugh
The mother left with her son, and a month later the boy recovered, and the fame of the holy healing power of the starets Sergius (as they now called him) spread throughout the whole district.
A pail had been upset and water spread in all directions.
Each new form, also, as soon as it has been much improved, will be able to spread over the open and continuous area, and will thus come into competition with many others.
I conclude, looking to the future, that for terrestrial productions a large continental area, which will probably undergo many oscillations of level, and which consequently will exist for long periods in a broken condition, will be the most favourable for the production of many new forms of life, likely to endure long and to spread widely.
The blue smoke of wood fires spread in a thin mist above the high-pitched roofs of houses that had glistening walls of woven reeds, and all round them rough wooden pillars under the sloping eaves.
Very softly down the glade runs a waiting, watching shade, And the whisper spreads and widens far and near; And the sweat is on thy brow, for he passes even now-- He is Fear, O Little Hunter, he is Fear!