What is a spread?
A spread in trading is the difference between the buy (offer) and sell (bid) prices quoted for an asset. The spread is a key part of spread betting and CFD trading, as it is how both derivatives are priced.
Many brokers, market makers and other providers will quote their prices in the form of a spread. This means that the price to buy an asset will always be slightly higher than the underlying market, while the price to sell will always be slightly below it.
Spread can have a variety of other meanings in finance but they all refer to the difference between two prices or rates. For example, it is also a strategy in options trading,* known as an option spread. This involves buying and selling an equal number of options with different strike prices and expiration dates.