Bid-ask spread
Also called: spread, bid, ask
The bid is the highest price a buyer will pay right now, the ask is the lowest price a seller will accept, and the spread is the gap between them.
Buying at the ask and selling at the bid straight away loses the spread, which is a hidden cost of trading. Busy stocks have spreads of a cent; thinly traded ones can be much wider.
Formula
Spread = ask − bid
In Journey Shares
Every profile shows a broker-style quote with the bid, ask, spread and depth. →
Related terms
- Liquidity: Liquidity is how easily something can be bought or sold quickly without moving its price much.
- Order book: An order book is the live list of buy and sell orders waiting at each price for a stock.
- Market order: A market order buys or sells straight away at the best price available, trading certainty of filling for certainty of price.
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