The bid-ask spread is an indication of market liquidity, giving investors an idea of how easy it is to buy and sell securities.

## Formula

``Bid Ask Spread = Ask Price - Bid Price``

`In order to calculate the Bid-ask spread, it is important to understand that it represents the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept. The bid-ask spread is a cost associated with trading any financial instrument and is not always apparent to novice investors. To calculate the Bid-ask spread, `one must subtract the bid price from the ask price`. For example, if a seller is asking \$10 and a buyer is bidding \$9, the Bid-ask spread would be \$1. It is important to remember that the Bid-ask spread is a cost associated with trading any financial instrument and should be taken into consideration when trading. Tools such as Sourcetable can be used to help with tracking Bid-ask spread calculations.`

`The bid-ask spread is a measure of market liquidity. It is the difference between the highest price that a buyer is willing to pay for an asset (the bid price) and the lowest price that a seller is willing to accept for the asset (the ask price). `

`The bid-ask spread tells us how liquid a market is. A smaller spread is an indication of higher liquidity, as it suggests that buyers and sellers are willing to transact closer to the mid-price.`

`The formula for calculating the bid-ask spread is `bid-ask spread = ask price - bid price`.`

## Key Points

`Bid Ask Spread = Ask Price - Bid Price`
The bid-ask spread is the difference between the highest bid price and the lowest ask price. It is an important concept to understand when trading in the stock market, as it can affect the price of stocks and the liquidity of the market.
Highest Bid Price
The highest bid price is the highest price that a buyer is willing to pay for a security. This price is determined by buyers in the market and is often set by the highest bidder in the auction. 