Jun 23 2010

What does the bid-ask spread refer to when purchasing a stock?

Category: Finance

Answer:

The bid-ask spread is typically the quantity by which the ask price surpasses the bid price. In simpler terms, the “bid” price is the highest amount that a buyer is willing to pay for an asset. The “ask” is the lowest price that a seller is willing to let it go for. The disparity of the bid and ask price is a measure of the stocks liquidity and the volatility of the market.


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