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Markets

Spread

The difference between the buy price and the sell price of an asset (or between two interest rates), which typically represents the margin or implicit cost of a trade.

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In its most common form, the spread is the difference between the price at which you can buy an asset (ask) and the price at which you can sell it at that same instant (bid). The narrower the spread, the more liquid that asset's market tends to be.

Spread on mortgages

On a variable-rate mortgage, the "spread" (diferencial) added to the Euríbor to form the TIN (nominal rate) is also referred to this way: it's the margin the bank takes on top of the reference index.

Spread with brokers and exchanges

In trading, the bid-ask spread is one of the ways brokers and exchanges charge for facilitating a trade, even when they advertise "zero commissions": the real cost is baked into the difference between the buy and sell price.

Credit spread

In bonds, the credit spread is the difference in yield between a corporate bond (or one from a riskier country) and a reference bond considered "risk-free," and it reflects the premium investors demand for taking on that extra risk.