Spread
The gap between the best bid and best ask in an order book, representing an immediate trading cost.
The spread is the difference between the highest price buyers are currently bidding and the lowest price sellers are currently asking. A trader who buys at the ask and immediately sells at the bid loses the spread before fees.
Tight spreads usually indicate strong liquidity and competition among market makers. Wide spreads can signal low volume, volatile conditions, exchange risk, or an asset that is hard to price.
Related terms
3 linkedExplore connected entries beyond the alphabetical index.
Order Book
→A real-time list of buy and sell orders organized by price level on an exchange.
Liquidity
→How easily an asset can be bought or sold in size without causing a large price move.
Market maker
→A market maker quotes buy and sell prices to provide liquidity, earning the spread and/or incentives.
All terms and definitions may update as the Cryptionary improves.
