Bid ask spread意思

"Bid ask spread" is a term used in financial markets, particularly in the context of trading stocks, bonds, or any other type of security. It refers to the difference between the price at which a trader is willing to buy a security (the bid price) and the price at which they are willing to sell it (the ask price).

The bid price is the highest price that a buyer is willing to pay for a security, while the ask price is the lowest price at which a seller is willing to sell it. The difference between these two prices is known as the bid-ask spread.

For example, if the bid price for a stock is $100 and the ask price is $100.05, the bid-ask spread is $0.05. Traders typically aim to buy at the bid price and sell at the ask price, profiting from the spread.

The bid-ask spread is an important factor in determining the liquidity and efficiency of a market. A narrow spread indicates a liquid market with high trading volume, while a wide spread suggests a less liquid market with lower trading volume.