Bid-Ask Spread
The spread is the gap between the highest price buyers will pay and the lowest price sellers will accept.
The bid is the best price a buyer is currently offering; the ask is the best price a seller is asking. The difference between them — the spread — is an implicit cost of trading and a good gauge of liquidity: heavily traded large caps have spreads of pennies, while thinly traded shares can have wide spreads.
Our pages show snapshot prices rather than live bid and ask quotes, so the spread is one of the details to check with a broker before trading.
Further Reading
Burton Malkiel's evidence-based guide to markets, indexing and long-term strategy.
Check Price →A dedicated finance calculator for TVM, NPV and rate-of-return work.
Check Price →JL Collins' plain-English guide to index investing and financial independence.
Check Price →Related terms
Recommended Reading & Tools
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Larry Harris's standard reference on market microstructure, spreads and liquidity.
Check Price →A structured logbook for tracking positions, theses and outcomes over time.
Check Price →Robert Kiyosaki's bestseller on assets, liabilities and financial literacy.
Check Price →