A narrow bid-ask spread indicates efficiency in the spot exchange market.

Question

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A narrow bid-ask spread indicates that there is a small difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask) for a particular asset. This indicates that there are many buyers and sellers in the market, which leads to efficient price discovery and liquidity. Conversely, a wide bid-ask spread may indicate that the market is less efficient, with fewer buyers and sellers and less liquidity.

A Narrow Bid-Ask Spread Indicates Efficiency in the Spot Exchange