Glossary Detail: Bid-Ask Spread
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Backtesting Bid-Ask Spread on High-Beta Names
The difference between the highest price a buyer will pay (bid) and the lowest price a seller will accept (ask) — a direct measure of trading cost and liquidity.
Further Details:
The bid-ask spread is the difference between the bid price (highest price buyers are willing to pay) and the ask price (lowest price sellers are willing to accept). It represents the immediate cost of executing a round-trip trade and is the primary revenue source for market makers.