Spread
The spread is the difference between the highest bid and lowest ask price in an order book.
✦ Key Insight
It represents hidden trading cost and market efficiency.
✕ Common Misconceptions
Ignoring spread on altcoins
Trading during illiquid hours
Detailed Explanation
How It Works
Tight spread → high liquidity
Wide spread → low liquidity
FAQs
Q: Is a smaller spread better?
Yes, it reduces cost.
In Practice
Dig Deeper
Liquidity
Ease of buying/selling an asset without significantly moving its price (high liquidity = tight bid-ask spreads and fast fills).
Order Book
A real-time list of all buy (bids) and sell (asks) orders for a trading pair, showing market depth at different price levels.
Slippage
Slippage is the difference between the price a trader expects when submitting an order and the actual price at which the trade executes. Slippage is common in crypto markets and is usually more noticeable during high volatility or when trading low-liquidity tokens.