Bid-Ask Spread
Also called: spread
The gap between the highest price buyers will pay (bid) and the lowest sellers will accept (ask) — a direct cost of trading and a read on liquidity.
Every stock has a bid (best buy price) and an ask (best sell price); the difference is the spread. Buy at the ask and sell at the bid and you pay the spread on the round trip — an invisible cost on top of commissions. Liquid, heavily traded names have spreads of a penny; thin, low-volume names can have spreads of many cents or percent.
A wide spread is both a cost and a warning: it means few participants, harder fills, and more slippage. Active traders favor tight-spread names where they can get in and out near the quoted price.
On StockSetups
StockSetups sorts the universe most-liquid-first and lets you set minimum average-volume and price filters, keeping you in the tight-spread names where a setup is actually tradable.
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