◈ GLOSSARY · TRADING & MARKETS
Bid-Ask Spread.
A definition, in plain English — with the books that teach it.
Reviewed by ClearValue Editorial Team · Jun 27, 2026
◈ DEFINITION
What it means
Definition
The gap between the highest price a buyer is willing to pay (the bid) and the lowest price a seller will accept (the ask). It's a hidden cost of trading — the wider the spread, the more it costs you to get in and out. Liquid stocks like Apple trade with pennies of spread; thinly traded small caps and far-out-of-the-money options can have spreads wide enough to wreck a trade before it starts.
◈ IN PRACTICE
Example
If a stock shows a bid of $50.00 and an ask of $50.05, the spread is 5 cents. Buy at the ask and immediately sell at the bid and you're down 5 cents per share — $50 on a 1,000-share position before commissions.