spread
The gap between the bid price and the ask price that a market maker charges to buy or sell a stock, which is how the market maker earns money.
Where it is explained in full
When size changes the answer: ten dollars, ten thousand, and a hundred million are not the same money. Arithmetic scales in a straight line. The world does not. Past certain sizes, insurance runs out, prices move against you, rules change, and the cheap thing becomes expensive or the expensive thing becomes cheap. This page names the lines.
Funds: what you actually own when you buy one. Both kinds are baskets. The differences are in how you buy them, how they are priced, how they handle taxes, and what it costs to hold them for decades.
Options from the beginning: calls, puts, and the Greeks in plain words. What a contract actually is, what the numbers on the screen mean, and why an option's value before expiration is not the same as its payoff at expiration.
Spreading it out and betting big: what each one protects you from. Owning many things removes one kind of risk and leaves another one completely untouched. Knowing which is which keeps the word from turning into a slogan.
A definition says what a thing is; it never says whether it fits you. The guides explain how it works and name the professional who confirms it for a particular person. The No Advice Disclosure.
Words beside it
- Bid ask spread
The gap between bid and ask. A real cost of trading, paid on entry and exit.
- Credit spread (options)
Selling one option and buying another further out, collecting a net premium with a capped loss.
- Debit spread (options)
Buying one option and selling another further out, paying a net premium for a capped gain and capped loss.
- Spread (bid ask)
The gap between the buying and selling price. A real cost every trade.
Ask about spread
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