Bid-Offer Spread
A Bid-Offer Spread is the difference between prices quoted (either by a single market maker or in a limit order book) for an immediate sale (bid) and an immediate purchase (offer).
- AKA: Bid–Ask Spread, Buy-Sell Spread.
- See: Transaction Cost, Frictionless Market, Market Maker, Security (Finance), Shares, Futures Contract, Option (Finance), Currency Pair, Order Book (Trading).
References
2015
- (Wikipedia, 2015) ⇒ http://en.wikipedia.org/wiki/Bid–ask_spread Retrieved:2015-3-9.
- The 'bid–offer spread (also known as bid–ask or buy–sell spread (in the case of a market maker), and their equivalents using slashes in place of the dashes) for securities (such as stocks, futures contracts, options, or currency pairs) is the difference between the prices quoted (either by a single market maker or in a limit order book) for an immediate sale (bid) and an immediate purchase (offer). The size of the bid-offer spread in a security is one measure of the liquidity of the market and of the size of the transaction cost. [1] If the spread is 0 then it is a frictionless asset.