When you buy or sell anything in the stock market, there is always a "bid" and "ask" price. The bid price is the price at which someone is willing to buy the stock, and the ask price is the price at which someone is willing to sell the stock. The difference between these two prices is called the Bid-Ask Spread.The bid-ask spread can vary widely depending on the stock, but it usually falls somewhere between 1 and 10 percent. For example, if a stock has a bid price of $100 and an ask price of $105, the bid-ask spread would be 5 percent.The bid-ask spread is important because it represents the cost of trading. When you buy a stock, you have to pay the ask price, and when you sell a stock, you have to accept the bid price. So, if you're buying a stock with a 5 percent bid-ask spread, you're effectively paying a 5 percent premium.The bid-ask spread is also a function of supply and demand. If there are more buyers than sellers, the bid price will rise and the ask price will fall. Conversely, if there are more sellers than buyers, the bid price will fall and the ask price will rise.It's important to remember that the bid-ask spread is not a static number. It is constantly changing, and you need to take it into account when you're buying or selling stocks.
