Bid-offer spread

The bid-offer spread is simply the difference between the price at which you can buy a share and the price at which you can sell it.

The bid-offer spread is simply the difference between the price at which you can buy a share and the price at which you can sell it. There is a difference between the two prices because this is how the people who ensure there is a market for the shares (known as market makers') make money.

The bid price is what the market maker will pay you to sell your shares to them (it's what they'll bid for it). The offer price is what you have to pay to buy shares from them. The offer price is usually higher than the bid price so that the market maker can make a profit.

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