Bid & Ask Spreads

The bid-ask spread represents the difference between what buyers are willing to pay and what sellers are willing to accept. It’s a fundamental part of trading that reveals liquidity, market sentiment, and transaction costs—making it essential for both investors and exam-takers to understand.

You’ll learn:

  • What the bid & ask represent in a market quote

  • How to calculate the spread and interpret its size

  • The role of market makers and how they profit from the spread

  • How bid/ask dynamics affect order execution and pricing

📘 Related Exams: SIE, Series 7, Series 9, Series 65, Series 66
🧠 Skill Level: Intermediate
📈 Topics Covered: Quotes, liquidity, trading costs, market maker roles, spread interpretation

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Market Orders