Lesson Overview

Bid-Ask Spread Defined

The stock market is the biggest and most efficient live auction on the planet. But even within this huge market there are very illiquid markets for particular stocks that aren't as popular as say some of the big names; AAPL, GOOG, TWTR, etc.

Recognizing and understand how the bid-ask spread effects the prices you pay for an option and the "slippage" in the market is important as we continue to build on our understanding as to why trading liquid underlying is important.

Wide markets with regard to bid/ask spread can be extremely detrimental to your success and most traders fail to recognize it before it's too late.

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