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  1. Home
  2. Glossary
  3. Spread
GlossaryBrokers & Accounts

Spread

The difference between the highest price buyers will pay (the bid) and the lowest price sellers will accept (the ask). A narrower spread generally means lower trading cost.

The spread, visually

Bid, ask and the spread A horizontal price line marks a bid price on the left and a higher ask price on the right; the gap between them is labelled the spread. Bid £99.90 Ask £100.10 Spread = £0.20
The spread is an implicit cost of trading — you buy at the ask and sell at the bid.

The spread is effectively a cost of trading: you buy at the higher ask and sell at the lower bid.

Appears in these guides

  • Calendar SpreadsOptions
  • Credit SpreadsOptions
  • The Butterfly SpreadOptions
  • What Is A Debit Spread?Options
  • 0DTE & Short-Dated OptionsOptions
  • ADX & DMITechnical Analysis

Related terms

AskBidBrokerBuying PowerCash AccountCommissionFractional SharesISALeverageLimit Order

Related lessons

beginnerBrokers & Accounts

Cash Accounts

The simple, sensible default brokerage account: what a cash account is, how settlement and settled funds work, why it carries no borrowing risk, what happens to uninvested cash, and why it suits almost every beginner.

beginnerBrokers & Accounts

Commissions

The explicit cost of trading: what commissions are, the forms they take, how the spread and currency fees act as hidden commissions, why 'commission-free' isn't free, and how trading costs quietly erode returns.

beginnerBrokers & Accounts

401(k)

The US workplace retirement plan: what a 401(k) is, how pre-tax (and Roth) contributions work, why an employer match is free money to claim first, how tax-deferred growth compounds, contribution limits, vesting, and the rules around accessing the money.

Ironclad Research provides educational content only. Nothing on this platform is financial advice, a recommendation, or an offer to buy or sell any security. Always do your own research and consider professional advice before making financial decisions.