Spread |
| The difference between the bid price and the offer price for shares and for units in a unit trust. Market makers make their profit from the spread. They buy shares at the lower bid price and sell at the higher offer one. Illiquid stocks will have wider spreads. Spread is also used to describe the difference in yield between two bonds. For example, a higher risk corporate or emerging market bond might be sold at a spread of 300 basis points over a lower risk government issued bond. |
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