MANAGEMENT

Detailed explanation-1: -Example 1: Consider a stock trading at $9.95 / $10. The bid price is $9.95 and the offer price is $10. The bid-ask spread, in this case, is 5 cents. The spread as a percentage is $0.05 / $10 or 0.50%.

Detailed explanation-2: -Bid-Ask Spread (percentage) = ((Ask/Offer Price-Bid/Buy Price) – Ask/Offer Price) X 100. Example to help understand bid-ask spread calculation. Let’s say a stock is trading at Rs. 9.50 or Rs.

Detailed explanation-3: -You do this by subtracting the bid price from the ask price. For example, if you’re trading GBP/USD at 1.3089/1.3091, the spread is calculated as 1.3091 – 1.3089, which is 0.0002 (2 pips). Spreads can either be wide (high) or tight (low) – the more pips derived from the above calculation, the wider the spread.

Detailed explanation-4: -The bid-ask spread is the difference between the bid price and the ask price for a given security. The bid price represents the highest price a buyer is willing to pay for the security, while the ask price represents the lowest price a seller is willing to accept.