Spread
The difference between the highest price buyers are offering and the lowest price sellers are asking for an asset.
In crypto trading, the spread usually means the gap between the best bid price and the best ask price in an order book. The bid is the highest price someone is willing to pay, while the ask is the lowest price someone is willing to sell for. A narrow spread generally suggests strong liquidity and active trading, while a wide spread can signal lower liquidity, higher uncertainty, or faster-moving markets.
The spread matters because it is an implicit trading cost. If Bitcoin has a bid of $50,000 and an ask of $50,010, the spread is $10. A trader who buys immediately at the ask and then sells immediately at the bid would lose that $10 difference before fees. Market makers watch spreads closely because they often earn by buying near the bid and selling near the ask. For regular traders, checking the spread helps estimate the real cost of entering or exiting a position, especially on smaller exchanges or less-traded tokens.
Other terms in Crypto Trading
Basis Trade
A trading strategy that seeks to profit from the price gap between a crypto asset’s spot price and its futures or perpetual contract price.
Funding Rate
A periodic payment between perpetual futures traders that helps keep the contract price close to the spot market price.
Leverage Trading
Leverage trading is using borrowed funds to open a larger crypto position than your own capital would normally allow.
Limit Order
An order to buy or sell a cryptocurrency only at a specified price or better.