Glossary

The bid-ask spread is the difference between the highest price a buyer is willing to pay for an asset (the bid) and the lowest price a seller is willing to accept (the ask). 💸

The spread represents the gap between buying and selling prices in the market, and it can be an indicator of liquidity and trading activity.

For example, if a stock has a bid price of $50 and an ask price of $50.10, the bid-ask spread is $0.10. A narrow spread typically means the market is more liquid, and trading costs are lower.

Fun fact: In forex and cryptocurrency markets, 🌐 the bid-ask spread is often quoted in pips (percentage in points), which is the smallest price movement possible in the market. A smaller pip spread indicates a more liquid and cost-efficient market!