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Glossary ยท markets

What is Spread?

The gap between the current bid and ask price.

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The spread is the cost of instant execution. Tight spreads (a penny or two on major stocks) mean cheap trading; wide spreads on illiquid securities can add meaningfully to costs.

Placing limit orders instead of market orders lets you name your price and often gets executed inside the spread.

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Frequently asked questions

Why are pre-market spreads wider?

Fewer participants and less depth. Trading outside regular hours often means paying more for the same execution.

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