Trading glossary
The bid-ask spread is the gap between the highest buy price and the lowest sell price for an asset. Learn what it measures and why it matters.
The bid-ask spread is the gap between two prices in a market. The bid is the highest price a buyer is currently willing to pay, and the ask, sometimes called the offer, is the lowest price a seller is willing to accept. The spread is simply the ask minus the bid. It is one of the most direct signals of how a market is priced at any instant.
A spread exists because buyers and sellers rarely agree on a single price at the same moment. Market makers and other participants post orders on both sides and are compensated in part by the difference between them. The spread reflects the ongoing negotiation between supply and demand, and it updates continuously as new orders arrive and existing ones are filled or cancelled.
A narrow spread often points to an active, liquid market where many participants trade and prices are tightly clustered. A wide spread can suggest thinner liquidity, higher uncertainty, or a less actively traded asset. On Tyrian Trade, spread information helps users read how tightly an asset is priced, though the platform is informational and does not execute orders.
Subtract the bid from the ask. If the highest bid is 100 and the lowest ask is 100.5, the spread is 0.5. It is often expressed in absolute terms or as a percentage of the price for easier comparison across assets.
A wide spread usually reflects thinner liquidity, meaning the gap between buying and selling prices is larger. This can make an asset costlier to move in and out of, since a buyer and a seller start further apart on price.
Yes. The spread updates continuously as orders are placed, filled, or cancelled. It can widen during volatile or quiet periods and narrow when trading activity and competition among participants increase.