Bid-Ask Spread Definition

The bid-ask spread is the difference between the highest price a buyer will pay and the lowest price a seller will accept.

What is the Bid-Ask Spread?

The spread represents a cost of trading and tends to narrow in liquid markets and widen in less liquid ones.

Brokers may earn revenue from the spread, making it an important factor when comparing trading conditions.

If the bid is 1.0850 and the ask is 1.0852, the bid-ask spread is 2 pips.

A balance sheet is a financial statement showing a company's assets, liabilities, and equity at a specific point in time.

A bar chart is a price chart that shows the open, high, low, and close for a security over a set period using vertical bars.

The base currency is the first currency listed in a currency pair, against which the second currency is quoted.