Bid-offer price: Difference between revisions
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Bid offer prices (or bid-ask prices) are quoted by market makers simultaneously as the prices at which they will deal with the market either to buy or to sell. | Bid offer prices (or bid-ask prices) are quoted by market makers simultaneously as the prices at which they will deal with the market, either to buy or to sell. | ||
The difference between the bid price and the offer price is known as the spread. | |||
The greater the spread, the greater the market maker’s compensation for their work and risk in making the two way price; and the greater the all-in transaction cost for the price taker. | |||
Revision as of 10:10, 11 May 2016
Bid offer prices (or bid-ask prices) are quoted by market makers simultaneously as the prices at which they will deal with the market, either to buy or to sell.
The difference between the bid price and the offer price is known as the spread.
The greater the spread, the greater the market maker’s compensation for their work and risk in making the two way price; and the greater the all-in transaction cost for the price taker.
