A spread is a term used to describe the difference between two values, often the difference between the bid and ask price of a financial instrument such as a stock, bond, or currency.
For example, if the bid price of a stock is $10 and the ask price is $11, then the spread is $1. The spread can also refer to the difference between the interest rates on two different financial instruments or the difference between the yield on two different bonds with similar characteristics.
In general, a narrower spread is preferable for investors and traders because it means that there is less difference between the buying and selling price of an asset, making it easier to execute trades and potentially generate profits.
