Bid-ask spread

The bid-ask spread is the difference between the best bid and the best ask. It is the immediate cost of trading in and straight back out, and it widens when market makers judge the risk of being adversely selected to have risen.

market microstructure · updated 2026-09-08

See also

• Market maker — A market maker quotes both a bid and an ask continuously, earning the spread in exchange for supplying immediacy. Market making in…
• Adverse selection — Adverse selection is the risk that the counterparty who trades against your resting order knows something you do not. Market maker…
• Touch — The touch is the best bid and best ask taken together — the top of the order book. An order placed 'at the touch' is at the curren…

Terms that refer here

Adverse selection · Ask · Bid · Market maker · Tick size · Touch

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