Description
Spread is an important concept in trading and refers to the difference between the bid and the ask price of an asset. The bid price is the highest price a buyer is willing to pay for a security, while the ask price is the lowest price a seller is willing to accept for a security. The spread is the difference between the two prices and is usually expressed in pips, which is the smallest incremental change in the price of a security.
The spread is an important part of trading and can be used for various purposes, such as hedging, making a profit, or reducing risk. Spreads can also be used to take advantage of arbitrage opportunities, which is when a trader buys an asset in one market and sells it in another market at a higher price.
In summary, spread is the difference between the bid and ask prices of an asset. In forex trading, the spread is the difference between the bid and ask prices of a currency pair. In the stock market, the spread is the difference between the bid and ask prices of a stock. In options trading, the spread is the difference between the exercise price of an option and the current market price of the underlying asset. In futures trading, the spread is the difference between the prices of two related futures contracts. Spreads can be used for various purposes, such as hedging, making a profit, or reducing risk.