Bid-ask spread

Also called: bid/ask, spread (market)

In one line

The gap between the highest price a buyer will pay (bid) and the lowest a seller will accept (ask) for a share.

In plain English

On a marketplace, buyers post bids and sellers post asks. The spread between them shows how far apart the two sides are — wide spreads mean illiquid, hard-to-price shares.

If you were explaining it to a 5-year-old

One kid offers 6 coins for your toy; you're asking 8. The 2-coin gap between you is the bid-ask spread.

Why it matters when you sell

A wide spread on your company's shares signals a tougher sale and more negotiation; a tight one means easier, fairer pricing.

Put it to use

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Sources

A general market-practice term. See how we define and source the glossary in our methodology. General information, not advice.

Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.

Bid-ask spread

Related terms

Put it to use