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Spread

Spread – has several definitions. The most important definition is difference between the price of purchase and the price of sale, that is, between bid level and ask level. Thus, the lower is the spread size the more liquid is financial instrument, but traders expenses for trading are smaller. In Forex spreads are identified in points. Spreads for shares are expressed by two ways. In this case spread can mean the difference between profitability of several obligations, for option – the difference between current quotations of price and quotations of price realizing.

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