Bid-Ask Spread
What is Bid-Ask Spread?
The difference between the highest price buyers will pay and the lowest price sellers will accept.
Understanding Bid-Ask Spread
The bid is the best price a buyer is offering; the ask is the best price a seller is asking. The spread is a cost of trading: buying at the ask and immediately selling at the bid loses the spread.
Heavily traded securities have narrow spreads; thinly traded ones have wide spreads.
Example
If a stock's bid is $50.00 and its ask is $50.05, the spread is 5 cents.