The quoted bid-ask spread is the difference between a market maker‘s (a dealer‘s) ask and bid price quotes at a given point in time. In equation form, it is given by:

Quoted spread_t= ask price_t – bid price_t

More specifically,

Quoted spread_t = lowest ask price_t – highest bid price_t

Where “t” refers to the t-^th trade of some stock during the trading day. This spread implies that that if an investor/trader purchases a stock and then instantaneously sells it, he would pay the quoted ask price and get the quoted bid price, thereby incurring a trading cost equal to the bid/ask spread. This measure of bid-ask spread is premised on the idea that trades cannot be executed within the quoted bid-ask spread. In practice, the quoted spread was usually used at the end of the trading day. However, other measures account for the whole trading day are used by traders (e.g., an equal-weighted average quoted spread).