Bid-Ask Spread
Educational only, not financial advice.
The bid-ask spread is the gap between the highest price a buyer is currently willing to pay (the "bid") and the lowest price a seller is willing to accept (the "ask") for a stock or ETF.
Why it matters
- A wider spread is an implicit trading cost, paid every time you buy or sell.
- Highly liquid ETFs and large stocks tend to have narrow spreads; thinly traded ones can have wide spreads.
- Spreads tend to widen during volatile or low-volume periods, such as market open or close.
Simple example
- If an ETF's bid is $50.00 and ask is $50.02, the spread is $0.02, or about 0.04% of the price.
- A thinly traded niche ETF might have a $0.30 spread on a $50 price — about 0.6%, a much larger implicit cost.
Related terms
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Sources
Reviewed by Greg Parsons. Links checked October 14, 2026. Educational only, not financial advice.