Narrowing The Spread

Narrowing the Spread - Narrowing the Spread is the act of reducing the gap between the highest price a buyer of a security or other asset is willing to pay and the lowest price a vendor is willing to offer. The divide narrows when a potential buyer offers a higher price and a potential seller offers a lower price. As the allotment continues to narrow, the security becomes more liquid. It is the spread between the bid and asked prices of a security as a result of bidding and offering by market makers and specialists in a security. The lowest price anyone will sell.