Spreads are also a term used in poker and when placing bets on sports events. In etymological terms, the word ‘spreadsheet’ is broken down, literally into meaning ‘a sheet showing the spread’.Īnyone who has ever sat down to work out their monthly finances will have ended up with a spread in all but name in the difference between monthly income and expenditure. Spreads are sometimes cited as a sign that the market is slowing down and there has been a decrease in liquidity. ![]() In a spread trading example, in the trading of bonds, the spread refers to the difference in yield between bonds of different maturities and similar quality or vice versa. The term can also be found in betting and gambling settings. Spreads are used across the finance world, from stocks to futures, commodities and bonds. ![]() The bid price is the highest price that a buyer is willing to pay for an asset, while the ask price is the lowest price that a seller is willing to accept. In finance, the spread is the difference between the bid and ask prices of the same security or asset.
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