Trading basics
Spread
Also known as: bid-ask spread
The spread is the difference between the bid (sell) price and the ask (buy) price of an instrument.
It represents an immediate transaction cost: you buy at the ask and can only sell at the lower bid. Liquid markets have tight spreads; thin or volatile markets widen them. Spreads, like commissions and slippage, must be modelled in a realistic backtest.
Related terms
Build strategies around spread without code — drag nodes onto the Algovex canvas, backtest, and export.
Build a strategy free →