Term
Bid-Ask Spread
The difference between the highest bid and lowest ask price for an asset.
Type:
trading
1
definition
The bid-ask spread represents transaction costs and liquidity conditions. Tight spreads indicate good liquidity; wide spreads imply higher slippage risk.
Example 1.1
If bids are $9.95 and asks are $10.05, the spread is $0.10. A market buy will likely execute near $10.05, incurring the spread as implicit cost.
Related Terms
Liquidity
→The ease with which a crypto asset can be bought or sold without affecting the market price.
finance
trading
Market Order
→A type of order to buy or sell a security at the best available price in the current market.
trading
Limit Order
→A trading instruction to buy or sell an asset at a specified price or better.
trading
All terms and definitions may update as the Cryptionary improves.
