Spread
Difference between the buying price and the selling price of an asset in the market.
Beginner-friendly explanation
The spread is simply the difference between the price at which you can buy (ask price) and the price at which you can sell (bid price) a crypto. Example: If Bitcoin has an ask price of €30,050 and a bid price of €30,000, the spread is €50.
Intermediate-level insight
A low spread generally indicates good market liquidity, as it means there are many buyers and sellers, allowing quick transactions at competitive prices. Example: On highly liquid markets like BTC/USD, the spread is often below 0.1%.
Advanced perspective
In-depth spread analysis is crucial in advanced trading, particularly scalping and algorithmic trading. It helps identify market quality, true liquidity depth, and anticipate implicit costs during frequent trades. Example: An algorithmic trader analyzes real-time minute spread fluctuations across multiple platforms to detect arbitrage opportunities.
Markets & Order Types
spread, bid, ask, difference, liquidity, transaction cost, scalping, arbitrage