The “bid-ask spread” in markets refers to the difference between the highest price a buyer is willing to pay (the bid) and the lowest price a seller is willing to accept (the ask).
This spread is essentially the gap between buying and selling prices and serves as a measure of market liquidity. A narrow spread usually indicates high liquidity and lower trading costs, while a wider spread suggests lower liquidity and higher costs. The bid-ask spread is important for traders and investors as it impacts the price at which they can enter or exit positions.
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