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SP
S&P 500 6,337.5 ▼ -0.28%
€$
EUR / USD 1.1452 ▼ -0.39%
NQ
NAS 100 22,918 ▼ -0.65%
Bitcoin 66,612 ▲ +1.00%
Au
XAU / USD 2,318.4 ▲ +0.53%
£$
GBP / USD 1.3175 ▼ -0.06%
Ξ
Ethereum 2,042.5 ▲ +2.94%
DJ
US 30 42,518 ▼ -0.21%
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Stock Market Beginner 1 min read

Bid-Ask Spread Stock

Definition
Difference between highest buy and lowest sell price for a stock.

The bid-ask spread in the stock market refers to the difference between the highest price that a buyer is willing to pay for a stock (bid price) and the lowest price that a seller is willing to accept (ask price).

Understanding the bid-ask spread is crucial for traders as it indicates the liquidity of a stock and the potential profit or loss that can be made on a trade. A wide bid-ask spread suggests lower liquidity, making it harder and more expensive to buy or sell the stock, while a narrow spread indicates higher liquidity and potentially lower transaction costs.