What does the spread mean in trading?

Asked 4 years ago

How does a spread work?

Andia Rispah Igobwa

Thursday, November 18, 2021

Generally, a spread is a difference between two prices, rates, or yields.

The bid-ask spread is most prevalent, referring to the difference between a security's or asset's asked and offered prices.

When the spread is larger than what you want to trade, it may also be referred to as the difference in a trading position - the gap between a short position (that is, selling) in one futures contract or currency and a long position (that is, buying) in another.





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