Spread
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Join →The spread is the difference between the best available buying price (ask) and selling price (bid) at a given moment. It is one of the basic transaction costs of trading. A narrow spread generally indicates efficient liquidity at the current level, while a wide spread can make entering and exiting a position more expensive. Spread can vary by instrument, market conditions, trading session, liquidity, and volatility. We should learn to account for it before judging whether a trade is attractive.
Key Terms
- Spread — the core concept introduced in this lesson.
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