What is the bid-ask spread?

Question

Quizplus · Accepted Answer

The bid-ask spread refers to the difference between the price a buyer is willing to pay for a share (the bid price) and the price a seller is willing to accept (the ask price) for that same share. This difference represents the costs and potential profits for market makers, traders, and brokers involved in buying and selling shares on an exchange, and can also be affected by supply and demand factors. Option A would be more accurately described as transaction fees, while option C refers to the concept of capital gains or losses on ownership of shares, and option D describes price differences between separate marketplaces.

What Is the Bid-Ask Spread