Spread
The spread is the difference between the highest bid and lowest ask price in an order book.
✦ Key Insight
It represents hidden trading cost and market efficiency.
✕ Common Misconceptions
Ignoring spread on altcoins
Trading during illiquid hours
Detailed Explanation
How It Works
Tight spread → high liquidity
Wide spread → low liquidity
FAQs
Q: Is a smaller spread better?
Yes, it reduces cost.
In Practice
Dig Deeper
Liquidity
Ease of buying/selling an asset without significantly moving its price (high liquidity = tight bid-ask spreads and fast fills).
Order Book
A real-time list of all buy (bids) and sell (asks) orders for a trading pair, showing market depth at different price levels.
Slippage
Slippage is the difference between the expected price of a trade at the time of submission and the actual executed price, caused by market movement or insufficient liquidity during confirmation.
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