Definition: Bid-Ask Spread is typically the difference between ask (offer/sell) price and bid (purchase/buy) price of a security. Ask price is the value point at which the seller is ready khổng lồ sell và bid price is the point at which a buyer is ready to buy. When the two value points match in a marketplace, i.e. When a buyer & a seller agree to the prices being offered by each other, a trade takes place. These prices are determined by two market forces -- demand & supply, & the gap between these two forces defines the spread between buy-sell prices. The larger the gap, the greater the spread! Bid-Ask Spread can be expressed in absolute as well as percentage terms. When the market is highly liquid, spread values can be very small, but when the market is illiquid or less liquid, they can be large.Description: Calculation of Bid-Ask Spread:Bid-Ask Spread (absolute) = Ask/Offer Price – Bid/Buy Price Bid-Ask Spread (%) = ((Ask/Offer Price- Bid/Buy Price) – Ask/Offer Price)*100Example: Gold (December) futures contract on MCX has best buy price at Rs 26,473 và best sell price at Rs 26,478. So the Bid-Ask Spread is equal lớn (Rs 26,478-Rs 26,473) = Rs 5 và the percentage spread will be equal to lớn ((5/26,478)*100) = 0.019% There can be various buyers & sellers in the market and they may be willing lớn buy/sell any security at different price points. So, all price points cannot be used to calculate Bid-Ask Spread. This can be calculated by using the lowest Ask Price (best sell price) & highest Bid Price (best buy price). The Bid-Ask Spread is one of the important trading points in the derivatives market and traders use it as an arbitrage tool lớn make little money by keeping a kiểm tra on the ins và outs of Bid-Ask Spread.Bid-Ask spread is used in following arbitrage trades:1) Inter-market spread : When a trader buys the futures of a security having a particular expiry on one exchange & sells the same security contract with a near-expiry on another exchange,2) Intra-market spread : When the contract of one security is bought and that of another security is sold on the same exchange e.g. Gold & silver spread trade,3) Calendar spread : When a security contract of one expiry date is bought and another contract of the same security with a different expiry date is sold on the same exchange.Some of the important elements lớn Bid-Ask Spread: 1) The market for any security should be highly liquid, otherwise there may be no ideal exit point khổng lồ book profit in a spread trade.2) There should be some friction in demand-supply of that security, because that creates chances for a wider spread.3) A trader should not use ‘market order’ for spread trade, otherwise the spread opportunity can be missed. It’s wise to lớn use ‘limit order’ where the trader decides the entry point.4) The range of a spread trade is relative to that particular security market, it’s not same for all.5) Always check Bid-Ask Spread ins & outs, & look for spreads either in absolute or percentage terms for individual security. If it’s a margin trade, then use spread percentage.6) Bid-Ask Spread trade involves a cost, as you are doing two trades simultaneously.7) Bid-Ask Spread trades can be done in almost all kinds of securities, but they are quite popular in forex, interest rate yields and commodities.Souce : Sasha Evdakov

Bạn đang xem: Bid price là gì

Trending DefinitionsDebt fundsRepo rateMutual fundGross domestic productData miningAdvertisingProductMonopolyCryptographyDepreciation

Rajasthan RoyalsMann Ki BaatRansomwareAther EnergyMonsoon News LiveWordle 344 Answer TodayJIOiPhone 14AadhaarHeardle 93 AnswerJungkookQuordle Today AnswerBank Holidays June 2022Everest DayBO Hopkins Death NewsWhat is a Green cardTax slab
News Live!Markets Live!EconomyStock Reports PlusStock ScreenerMF ScreenerCandlestick ScreenerWeb Stories

Xem thêm: Thông Tin Về Lê Lý Lan Hương (Diễn Viên), Tiểu Sử, Sự Nghiệp Và Đời Tư Hot Girl Ảnh Thẻ

Mann Ki BaatIPL FinalMonsoon News LiveQuordle today AnswerWordle 343 Answer TodayAadhaarJungkookTour Of Duty SchemeBank HolidaysBO Hopkins Death NewsBinance Coin PriceWhat are balanced mutual fundsGlobal marketsMutual fundsRupeeAadhaar CardHow lớn save Income Tax
Mann Ki BaatIPL FinalWinona RyderTenzing NorgayJungkookMonsoon News LiveSriya LenkaWordle 344 answer TodayJIOiPhone 14Google MapsRajasthan RoyalsAadhaarIPL Purple Cap 2022Monaco Grand PrixTour Of Duty SchemeAther Energy
Standard Deviation CalculatorIncome Tax CalculatorAge CalculatorTime CalculatorBMI CalculatorGPA CalculatorStatistics CalculatorFraction CalculatorDiabetes Risk CalculatorDate CalculatorLog Calculator

Xem thêm: Câu Chuyện Về Thời Thơ Ấu Của Salah Mohamed Salah Là Ai, Mohamed Salah

Tata Power share PriceITC nói qua PriceSBI mô tả PriceYES bank Share PriceTCS nội dung PriceVedanta nội dung PriceBajaj Finance chia sẻ PriceIndian Oil Corp. Share PriceLife Insurance Corporation Of India nội dung PriceLIC Housing tóm tắt Price