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What is the bid-ask spread?
The bid-ask spread is the gap between the highest price a buyer is offering (the bid) and the lowest price a seller is asking (the ask). A trade that happens immediately usually buys at the ask or sells at the bid.
What it means for you
Buying and then selling straight away loses the spread, even if the price has not moved. The quoted price is often the midpoint, so a wide spread means you sell for less than the number shown. FINRA notes a narrow spread can signal good liquidity but is not the whole picture: order size and depth also count.
How it works
The bid is the highest price any buyer in the market is offering; the ask is the lowest price any seller will accept. Trading immediately means accepting the other side: you buy at the ask and sell at the bid, so a round trip costs the spread before any fee. Spreads tend to be narrow where many participants trade and wide where few do, which is why FINRA treats them as one sign of liquidity. The spread covers only the top of the book, though; a larger order also runs into the depth below, so order size counts as well.
An example
Say a coin shows a bid of 99 dollars and an ask of 101, with 100 quoted as the price. Buying 10 coins costs 1,010 dollars; selling them straight back returns 990. The 20-dollar gap is the spread, paid even though the price never moved.
Sources: FINRA: Understanding Market Liquidity and Your Investments, CFTC: Glossary · checked 4 October 2026
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