Science Fair Project Encyclopedia

Spread

In finance a spread is the difference between the price bid and the price asked on a commodity or security.

The profit made by market makers is largely the direct result of this spread, also called the turn .

Also in finance, a spread can refer to the difference in price between related securities or different markets in the same security. E.g. between the futures market and the spot market. (For instance the spark spread in the energy market, a bond yield spread, or the Option Adjusted Spread of a mortgage backed security over treasury bonds.)

Spread traders hold long and short contracts simultaneously in the same or related security markets.

Financial glossary: Spread

A food spread is an edible paste which is usually spread out [hence the name] over the surface of another food, e.g. toast.

10-26-2009 08:16:03
The contents of this article is licensed from www.wikipedia.org under the GNU Free Documentation License. Click here to see the transparent copy and copyright details