The difference between bid and offer prices (ask prices) for securities trading on exchanges or other types of venues. In other words, it is the amount by which the ask price exceeds the bid price for a tradable security (or broadly, any an asset trading in an active market). Other assets or products that have bid-ask spreads include futures contracts, options, currency pairs, etc. The spread is maintained between the prices quoted for an immediate sale (offer) and an immediate purchase (bid). The bid-ask spread a market maker‘s compensation (and hence, it a markup) as to its readiness to take a position on either side of the market in the security/ asset (that is, its role matching buyers with sellers). Therefore, the greater the risk a market marker bears for lack of interest on either side, the more it demands in terms of a bid-ask spread.

The bid and ask (or asked or offered) prices together form a quotation (quote) on a specific exchange at a given point in time.