Spread

Definition

The difference between the broker's bid price and their ask price, that is, the difference between your price to sell and to buy something. The difference is kept by the broker or exchange. The size of the spread (i.e. the difference between the two prices) reflects the overall supply and demand, and often the liquidity. For many online brokerages, the spread is the only profit they make - in order to simplify terms of trade, they do not apply fees or subscriptions. This makes it much easier to compare brokers and their services to find one that suits your needs.