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What is the Bid-Ask Spread?

The Bid-Ask Spread is the difference between an offer made on a security and the price a seller is willing to accept.

The Bid-Ask Spread is the amount by which the ask price exceeds the bid. For example, if the bid price is $50 and the ask price is $51 then the "bid-ask spread" is $1.

The larger the bid-ask spread, the less liquid the market for that particular security - buyers and sellers are too far apart for trades to occur easily. When trading, investors have to pay attention to the bid-ask spread, because it is ultimately an additional cost to investing in or trading stocks.

What is a Market-Maker Spread?
What are Pink Sheets?

Keywords: trading, liquidity, bid and ask prices, investment basics,