Re:Stock-trading app Robinhood was rejected by 75 investors
by cdelsolar on Sunday May 13, 2018 @02:13PM
(#17060152)
spread
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Re:Stock-trading app Robinhood was rejected by 75 investors
by stochastic_monk on Sunday May 13, 2018 @02:16PM
(#17060171)
What does that mean, for those of us not in finance?
Re:Stock-trading app Robinhood was rejected by 75 investors
by xcasperx on Sunday May 13, 2018 @02:26PM
(#17060225)
The spread (bid-ask spread) is the difference between the bid (what the seller is willing to accept to sell it) and the ask (what the buyer is willing to pay for it).
When you buy a stock, you're buying at the ask price, when you sell you're selling at the bid price. The difference is what the clearer keeps.
Re:Stock-trading app Robinhood was rejected by 75 investors
by pgwhalen on Sunday May 13, 2018 @05:04PM
(#17061043)
This is mostly correct except for the last sentence, for any conventional definition of "clearer." You could replace "clearer" with "market maker" to be more correct, but it is important to note that the market maker isn't earning the spread every time they trade with you. They're only earning the spread in the aggregate, which is to say that they hope to both buy and sell with many people like you so that over time they are effectively earning the spread.
Re:Stock-trading app Robinhood was rejected by 75 investors
by frutiger on Sunday May 13, 2018 @02:27PM
(#17060227)
If you look on any exchange or broker for any security, the sell price at any given time will almost always be lower than the buy price. The instantaneous gap between the sell price and the buy price is known as the spread.
This spread reflects how much the exchange makes.
Re:Stock-trading app Robinhood was rejected by 75 investors
by optionsguy on Sunday May 13, 2018 @04:04PM
(#17060741)
Market makers profit off the bid/ask, not exchanges.
Re:Stock-trading app Robinhood was rejected by 75 investors
by adrr on Sunday May 13, 2018 @05:04PM
(#17061040)
They also get rebates for trades from the exchanges to encourage liquidity.