Table of contents

What is the Bid-Ask Spread? A Key Measure of Market Liquidity

Components of the Bid-Ask Spread: Order Processing, Inventory, and Information Costs

Factors Influencing the Size of Bid-Ask Spreads

How Bid-Ask Spreads Affect Traders and Investors

Measuring Bid-Ask Spreads: Quoted vs. Effective Spreads

The Bid-Ask Spread in Practice: Real-World Examples

Frequently Asked Questions