The gap between the bid and ask price of an asset.
The Spread is the difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask). Spread reflects market liquidity, trading activity, and the presence of market makers.
Why Spread Matters
Narrow spreads indicate healthy liquidity
Wide spreads signal low activity or high volatility
Affects execution price and slippage
Impacts profitability for traders and arbitrageurs
Market makers earn profits partly from capturing the spread.
Factors Influencing Spread
Trading volume
Market depth
Volatility
Token popularity
Competition among market makers
Exchange infrastructure
Illiquid tokens often show wide spreads due to thin order books.
Summary
Spread is the gap between bid and ask prices. A narrow spread means liquid markets; a wide spread indicates low liquidity or high volatility.
