Bid/Ask Spread Definition

Bid/Ask Spread Definition

Learn the definition of bid/ask spread and other ETF terminology from the glossary.

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Edited by: Staff

Learn more about Bid/Ask Spread

The bid/ask spread, in the context of ETFs, is the difference between the highest price a buyer is willing to pay for an ETF share (the bid price) and the lowest price a seller is willing to accept (the ask price). The spread represents the cost of executing an ETF trade, as investors will pay the ask price when buying and receive the bid price when selling. Wider spreads indicate less liquidity and higher transaction costs for the ETF.

Related Terms

Market Maker, Average Daily Volume (ADV), Liquidity

ETF Glossary is’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock exchanges, and they can encompass a wide range of asset classes, including stocks, bonds, commodities and more. Given the diverse range of ETFs and the complexity of financial markets, having a clear understanding of ETF-related terminology is instrumental for investors looking to make informed decisions, manage risks effectively and navigate the evolving landscape of ETF investments.