Bid-offer price: Difference between revisions
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Revision as of 12:31, 22 February 2018
Bid offer prices (or bid-ask prices) are two-way prices quoted by market makers simultaneously as the prices at which they are willing to deal with customers, either to buy or to sell.
The difference between the bid price and the offer price is known as the spread.
The spread is of course always favourable for the market maker.
The greater the spread, the greater the market maker’s compensation for their work and risk in making the two-way price.
Correspondingly, the greater the spread, the greater the all-in transaction costs for the customer.
