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Bid–ask spread explained.

The difference between quoted buying and selling prices. It is one part of trading cost and may change with liquidity, uncertainty, and the instrument being traded.

Markets

Bid–ask spread

The difference between quoted buying and selling prices. It is one part of trading cost and may change with liquidity, uncertainty, and the instrument being traded.

Example: A $20.00 bid and $20.10 ask have a $0.10 quoted spread.

Watch for: Ignoring the spread when comparing the cost of a trade.

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