Spread
Spread is a term used in finance to describe the difference between the bid and ask prices of a security or asset. The bid price is the highest price a buyer is willing to pay for a security, while the ask price is the lowest price a seller is willing to accept. The difference between the two prices is known as the spread. The spread is usually expressed in terms of a percentage or in points.
History of the Term
The term “spread” has been used in finance since the late 19th century. It was originally used to describe the difference between the price of a security and the price of the underlying asset. For example, the spread between the price of a bond and the price of the underlying asset (such as a stock) was known as the “spread”. Over time, the term has come to be used to describe the difference between the bid and ask prices of any security or asset.
Comparison Table
| Security/Asset | Bid Price | Ask Price | Spread |
|---|---|---|---|
| Stock | $50 | $51 | 2% |
| Bond | $100 | $102 | 2 points |
Summary
Spread is a term used in finance to describe the difference between the bid and ask prices of a security or asset. The spread is usually expressed in terms of a percentage or in points. The term has been used in finance since the late 19th century and is used to describe the difference between the price of a security and the price of the underlying asset. For more information about spread, you can visit websites such as Investopedia, The Balance, and Investing.com.
See Also
- Bid Price
- Ask Price
- Bid-Ask Spread
- Bid-Ask Quote
- Bid-Ask Volume
- Bid-Ask Bounce
- Bid-Ask Ratio
- Bid-Ask Spread Analysis
- Bid-Ask Spread Arbitrage
- Bid-Ask Spread Risk
