• The bid-ask spread is the difference between the highest price a buyer is willing to pay for an asset and the lowest price a seller is willing to accept.

  • Spread is the cost of a trade. Price takers buy at the ask price and sell at the ask price, while market makers buy at the ask price and sell at the ask price.
  • The bid represents the demand and the ask represents the supply of the asset.
  • The bid-ask spread is a de facto measure of market liquidity.