Bid-Ask Spread

Market makers earn the spread on every transaction they facilitate. The best bid is the highest price a buyer is willing to pay. The spread is the gap between the best bid and the best offer. The best offer is the lowest price a seller is willing to accept. Level 1 data represents the most basic market view using the best bid, best offer, and spread. Wide spreads make it possible for small trades to move prices substantially. The spread is the difference implied by selling at a higher price and buying at a lower price than other traders.