Bid-Ask Spread

A Bid-Ask spread is the difference between the price to buy an asset and the price to sell that asset. The bid is the highest price anyone is willing to pay for an asset in a particular market. The ask is the lowest price anyone is willing to receive to sell an asset in that same market. A Bid-Ask spread is always present in capital markets, as the price at which one can sell an asset will always be lower than the price at which one can buy the asset. Both the bid and the ask will be maker orders. If an ask and a bid ever overlap it will result in a trade being executed between these parties. Once the trade has executed, these orders are removed and the market has a new bid-ask spread. !A bid-ask spread is the difference between the lowest sell offer and the highest buy offer on a market.