Term
Spread
The difference between the best bid and best ask in an order book.
Type:
trading
1
definition
The spread reflects market liquidity and trading costs. Tight spreads usually indicate high liquidity and competition among market makers; wide spreads indicate illiquidity or higher risk.
Example 1.1
"On a liquid BCH/USD pair, the spread might be just a few cents; on a thin token pair, it can be several percent."
Related Terms
Order Book
→A real-time list of buy and sell orders organized by price level on an exchange.
trading
Liquidity
→The ease with which a crypto asset can be bought or sold without affecting the market price.
finance
trading
Market maker
→A market maker quotes buy and sell prices to provide liquidity, earning the spread and/or incentives.
markets
trading
All terms and definitions may update as the Cryptionary improves.
