Encyclopedia of Investment Terminology

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Spread

The spread in an investment deals with the difference two different entities in that investment in terms of their values. A spread can be the difference between an offer made to buy something, or its bid, and the price a seller can receive, which is its ask price. For instance, if the bid price is 20.25 and the ask price is 25.50, then the spread is .25 or 25 cents.


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