What Is the Bid-Ask Spread?

The bid-ask spread is 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). It’s a core part of market microstructure and a practical signal of both liquidity and trading costs.

When markets are deep and active, spreads tend to be tight. In thin or volatile markets, spreads widen as it becomes harder to match buyers and sellers at a single price. For everyday trading, the spread is a built-in cost: you can think of it as the price of immediacy.

Practical implications:

• Tighter spreads generally indicate more liquid markets and lower implicit costs.
• Wider spreads increase slippage risk and may make market orders more expensive.
• Around news or outside peak hours, spreads often widen; limit orders can help control execution prices.

You’ll see spreads directly on the order book and indirectly in the depth chart. The best bid and best ask define the top of book; their gap is the spread.