Sign In
Register
Free Annual Reports
•
Free Newsletters
Dictionary
Investing
Markets
Personal Finance
Active Trading
Forex
Professionals
Tutorials
Video
Simulator
Free Tools
Term Of The Day
Market Cannibalization
The negative impact of a company's new product on the sales performance of its existing...
Learn More »
Dictionary
Active Trading
Forex
Technical Analysis
Brokers
Options
Futures
Personal Finance
Retirement
Acronyms
Accounting
Bonds
Buzzwords
Currencies
Economics
Financial Theory
Formulas
Hedge Funds
Insurance
Investor Relations
Laws & Regulations
Mutual Funds
Real Estate
Statistics
Stocks
Taxes
Venture Capital
More News »
Build A Model Portfolio With Style Investing
This sophisticated approach will add flair to your returns.
Market Capitalization Defined
Find out the differences between mega-, large-, mid- and small-cap stocks ...
NetApp Seems Stupid-Cheap (NTAP, EMC, IBM, HPQ)
NetApp's valuation seems to expect a disastrous future. Fair value on NetApp ...
Investing
Investing Basics
Bonds & Fixed Income
Fundamental Analysis
Mutual Funds & ETFs
Economics
Definitions
Articles
Videos
Slideshows
Tutorials
Calculators
FAQs
More Analysis »
Netflix's New Series for Kids - Analyst Blog
Netflix Inc. (NFLX) announced that it has collaborated ...
Shire's 4Q EPS In Line, Revs Beat - Analyst Blog
Shire's (SHPG) fourth quarter 2012 earnings (excluding ...
V.F. Corp's 4Q Beats on EPS - Analyst Blog
V.F. Corporation (VFC) reported fourth-quarter 2012 ...
Markets
Analysis & Opinions
ETF Center
Sectors
Chart Advisor
Free Tools
Free Annual Reports
Mining
Public Administration
Utilities
Manufacturing
Education
Transportation
Agriculture & Forestry
Real Estate
Wholesale Trade
More Features »
Are Headhunters Worth It?
Some recruiters and recruiting firms use more methods to source suitable candidates than others do.
Is Relying On Home Equity For Retirement A Good Idea?
Of Americans aged 50 to 70, 47% have reported that they are relying on home equity to fund their retirements.
Get A Job As A Manager
Becoming a manager is an excellent way to earn status and repute within an organization.
Reasons You Should Use Your Credit Card For Purchases
Paying for everything with your credit card will earn you rewards and protect you against fraud, among ...
Personal Finance
Life Stages
Credit & Loans
Insurance
Retirement
Home & Auto
Savings
Budgeting
Entrepreneurship
Taxes
Credit Cards
Definitions
Articles
Videos
Slideshows
Tutorials
Calculators
FAQs
More News »
Build A Model Portfolio With Style Investing
This sophisticated approach will add flair to your returns.
Trading Double Tops And Double Bottoms
We look at how Bollinger Bands help accurately project entry and exit points ...
Market Summary For February 15, 2013
The major indexes in the U.S. were mixed this week, led by the Russell 2000 ...
4 Stocks With Recent Significant Gaps Higher In Price
These four stocks recently gapped higher. Will the price jump result in ...
Active Trading
Fundamentals
Charts & Patterns
Technical Indicators
Trading Strategies
Brokers
Software
Options & Futures
Chart Advisor
Discount Brokers
Definitions
Articles
Videos
Slideshows
Tutorials
Calculators
FAQs
More News »
Forex Fash: EUR/USD expected to weaken over medium-term - Wells Fargo
FXstreet.com (Córdoba) - The Wells Fargo analyst team expects the euro to weaken over ...
Trading the Range in Gold
Article Summary: Gold has been trading in a well-defined range for over 16 months. As ...
Forex: USD/CAD in session highs, eyes on 1.0080
FXstreet.com (Barcelona) - The stronger dollar is pushing the cross to fresh highs in ...
We have an accelerated downtrend at 1.5748 and only above here ...
FXstreet.com (Barcelona) - The sterling is hovering over the 1.5500/15 region on ...
Forex
Forex News
Economic Calendar
Forex Fundamentals
Forex Walkthrough
Forex Strategies
Brokers
Platforms
FX Trader
Free Resources
Definitions
Articles
Videos
Slideshows
Tutorials
Calculators
FAQs
Professionals
Global Professional Exams
FINRA Exams
Canadian Professional Exams
Careers
Continuing Education
Exam Prep Quizzer
Series 3
Series 6
Series 7
Series 9/10
Series 22
Series 24
Series 26
Series 55
Series 63
Series 65
Series 66
CFA Level I
CFA Level II
CFA Level III
CFP
CMT Level I
CMT Level II
CMT Level III
FRM Part I
FRM Part II
ERP
LIFA Level I
CSC
CPH
Active Trading
Forex
Technical Analysis
Brokers
Options
Futures
Personal Finance
Retirement
Acronyms
Accounting
Banking
Bonds
Tweet
0
Disqus
Email
Print
Reprints
Feedback
Share
Tweet
0
Disqus
Email
Print
Reprints
Feedback
0
Disqus
Bid-Ask Spread
Filed Under »
Capital Market
,
Stock Market Terminology
Definition of 'Bid-Ask Spread'
The amount by which the ask price exceeds the bid. This is essentially the difference in price between the highest price that a buyer is willing to pay for an asset and the lowest price for which a seller is willing to sell it.
Investopedia explains 'Bid-Ask Spread'
For example, if the bid price is $20 and the ask price is $21 then the "bid-ask spread" is $1.
The size of the spread from one asset to another will differ mainly because of the difference in liquidity of each asset. For example, currency is considered the most liquid asset in the world and the bid-ask spread in the currency market is one of the smallest (one-hundredth of a percent). On the other hand, less liquid assets such as a small-cap stock may have spreads that are equivalent to a percent or two of the asset's value.
Related Video for 'Bid-Ask Spread'
Sign Up For Term of the Day!
Try Our Stock Simulator!
Test your trading skills!
Related Definitions
Ask
The price a ...
Bid
1. An offer made ...
Left-Hand Side
The bid side in ...
Inside Quote
The best bid and ...
Locked Market
A market in ...
Market Maker Spread
The difference ...
Market Versus Quote - MVQ
A comparison ...
Third Market Maker
A third-party ...
Touchline
The highest ...
Hit The Bid
A buzzword used ...
Articles Of Interest
Stock Basics Tutorial
If you're new to the stock market and want the basics, this is the tutorial for you!
The Basics Of The Bid-Ask Spread
Understanding the real forces that move stock prices is part of being a good trader.
Top 7 Questions About Currency Trading Answered
Whether you're puzzled by pips or curious about carry trades, your queries are answered here.
Practical And Affordable Hedging Strategies
Learn how to find and use the most cost-effective ways to transfer risk.
The Forex Market: Who Trades Currency And Why
The forex market has a lot of unique attributes that may come as a surprise for new traders.
What are the determinants of a stock's bid-ask spread?
What do "BxA" numbers mean?
How can I be paying more than what a stock is trading for?
Why are the bid prices of T-bills higher than the ask prices?
What do the numbers that follow the bid and ask numbers in stock quotes represent?
Sponsored links
Please enable JavaScript to view the
comments powered by Disqus.
comments powered by
Disqus
Follow Us:
Hot Definitions
Love Money
Shark Watcher
Judo Business Strategy
Dogs Of The Dow
Chinese Hedge
X-Mark Signature
Recommended
Loading, please wait...
See More »
Trading Center
Partner Links
Dictionary
Investing
Markets
Personal Finance
Active Trading
Forex
Professionals
Tutorials
Video
Simulator
Free Tools
Content Library
Articles
Tutorials
Slideshows
FAQs
Calculators
Chart Advisor
StockAnalysis
Work With Investopedia
License Our Dictionary
Advertise With Us
Email Campaign Deployment
About Our Writers
Write For Us
Contact Us
Careers
Sponsors & Partners
Free Annual Reports
Smarter
PriceRunner
CanDoFinance
SymptomFind
Tips to Woo
© 2013, Investopedia US, A Division of ValueClick, Inc.
All Rights Reserved
|
Terms Of Use
|
Privacy Policy