Bid/Ask Spread Definition
Learn the definition of bid/ask spread and other ETF terminology from the etf.com glossary.
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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.
