ResourcesHelp CenterDecision RecipesComparing Opportunity Bid-Ask Spread

Comparing Opportunity Bid-Ask Spread

Comparing opportunity bid-ask spread allows you to reference a position’s bid-ask spread before moving through the automation.
Kirk Du Plessis
May 27, 2022
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2 min video

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Decision Recipes
Bid-Ask Spread
Automations
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FAQs

What is a bid-ask spread and why is it important?

The bid/ask spread is the difference between the bid price and the ask price. The bid is the price someone is willing to pay, and the ask is the price someone is willing to offer. Spreads that are more narrow are indicative of good liquidity, and typically offer better pricing opportunities.

Can a bid-ask spread be an indication of liquidity?

Yes, itan indication of liquidity

How can I see the actual bid-ask spread reading when I start to run my bot?

To see the bid-ask spread in real-time you will need to monitor your brokerage platform.

Why is a tight bid-ask spread important to most traders?

Spreads that are more narrow are indicative of good liquidity, and typically offer better pricing opportunities.

Can this calculation be done on stock or is it for options only?

It can be used for both stocks and options.

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