Bid-Ask Spread

The bid price is the highest price a buyer is willing to pay for an asset, while the ask price is the lowest price a seller is willing to accept.

• The difference between the bid and ask prices is known as the bid-ask spread.

• It can be influenced by various factors, including the supply and demand for a particular asset or security, market volatility, trading volume, and the liquidity of the market.

• The bid-ask spread tends to be wider for less liquid assets or securities and during times of high market volatility.

To sum up, it is an essential concept in trading and investing, as it reflects the current market conditions and provides insight into the supply and demand for a particular asset.