GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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profit
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spread
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arbitrage
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forward transaction
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Detailed explanation-1: -The bid price refers to the highest price a buyer will pay for a security. The ask price refers to the lowest price a seller will accept for a security. The difference between these two prices is known as the spread; the smaller the spread, the greater the liquidity of the given security.
Detailed explanation-2: -The difference between the bid and ask prices is what is called the bid-ask spread. This difference represents a profit for the broker or specialist handling the transaction. This spread basically represents the supply and demand of a specific asset, including stocks.
Detailed explanation-3: -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 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.