By SIMON CONSTABLE
Investors don’t always pay attention to bid-ask spreads. And those who do may find that comparing spreads between different exchange-traded funds can get tricky.
In essence, the bid-ask spread is the difference between the highest price that a market maker is willing to pay for an asset and the lowest price a market maker is willing to accept to sell it. The wider the spread, the more it costs investors for a round-trip trade—that is, to buy an asset and then sell it again. Read more here.
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