Personal Finance & Money Stack Exchange
Personal Finance & Money Stack Exchange

Questions tagged [spreads]

A spread ca refer to one of:

  • the difference between the bid and the ask price of a security.
  • an options position established by purchasing one option and selling another option of the same class but of a different series.
  • The difference between a financial measurement relative to some benchmark (e.g. credit spreads, Z-spreads)

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How does a dealer (or market maker) earn the bid-ask spread on a stock?

If I am correct, dealers purchase assets for their own accounts, and later sell them for a profit from their inventory. But the spreads is the difference between buy (or "bid") prices and sell (or "ask") prices at the same time. So how can dealers…
Tim
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How is it possible that these deep ITM stock options on DISH went from 52,000 volume, 550 open bids, 550 open asks to being completely dead overnight?

I bought 16 years of historical hourly stock options data for my personal investment study to test how particular strategies may have played out over a long period of time. I'm looking at the data for a DISH 1/21/2012 5/2.5c credit spread (yes I…
J.Todd
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Broker fees: Who gets the spread?

If one uses an online brokerage, or like my bank which offers me 100 free trades per year and I thus have no broker, who gets the spread?
Desmond
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If the spread goes to the market-maker, is the market-maker the exchange?

I understand that the bid-ask spread is the difference between the price a buyer is willing to pay and the price a seller is willing to take for an asset. I also understand that this difference goes to the "market-maker". Who is this…
Kinnard Hockenhull
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Italy BTP vs. German Bund spread. Care to explain?

I hear a lot of chatting about BTP/Bund spread recently. I am not familiar with this concept. Could you explain what it is and what it means, in layman's terms?
Stefano Borini
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Why divide by ask rate to get the spread?

I want to know why when we calculate the spread equation, that is the difference between ask rate and bid rate divided by ask rate, why can't we divide by bid rate?
Tanjina Afrin
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How do I minimize exchange rate spread costs when shopping online?

I get my income in euros. I need to pay for stuff in USD because I use shops like Dealextreme where the base currency is USD. I have a Visa Debit card (so not a real Visa) since I am a student but have stable income streams monthly. I get the…
Léo Léopold Hertz 준영
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Ex-dividend dates for Nikkei and Dow Jones on CFD and Spread Bet Markets?

I've found a few ex-dividend date sites for the Dow Jones (can't find any decent ones for the Japanese Nikkei Index). However the ex-dividend dates don't seem to match when I get dividend payouts on my CFD/Spread bet account, the US seems to have…
User101
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Why are vertical option spreads level 3, requiring margin?

Why are vertical spreads (e.g., buying a call at one strike and selling a call at another strike, at the same expiration date) classified as "Level 3" options strategies, therefore requiring margin? As far as I can see the maximum loss is the cost…
feetwet
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Backtesting daytrading strategy, how to handle the spread?

I am currently developing a daytrading application which based on rules and algorithms buys or sells stocks, which right now might buy/sell a stock in the magnitude of 100 per day. I am trying to backtest my strategy but i do not know how to handle…
Cleared
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How does a limit order work for a credit spread?

In the stock market, a limit order goes in the order book saying Someone is willing to buy 5 shares of this stock at $5. I understand the same would be true for an options order at a particular strike. But when putting an order for a call spread or…
Shamoon
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What does "compression of spreads on high-yield debt" mean?

What did Federal Reserve Chair Janet Yellen mean when she said the following? "We’ve also seen the compression of spreads on high-yield debt, which certainly looks like a reach for yield type of behavior." Source
thanks_in_advance
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In what ways is IEX different than a typical dark pool or a typical exchange?

In his recent best seller "Flash Boys" (#1 of the NYT best seller list), Michael Lewis tells the fascinating story of an unlikely hero, Brad Katsuyama from RBC. Upon realizing that "the stock market is rigged" -- he was a trader being front-run by…
arielf
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Can one earn only converting assets with different spread?

Can one earn only converting assets with different spread? Example: buy asset Y with asset X (i.e. BUSD/BTC) buy asset Z with asset Y (i.e. BTC/BNB) buy asset Y with asset Z (i.e. BNB/BUSD) and get an earn on X with spread between assets (i.e.…
markzzz
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Why is there such a large spread on bid/ask during extended trading?

I've noticed on a few stocks (NYSE:WHR, NYSE:PHM), that during extended hours trading, the bid/ask spread becomes extremely large. For example: Mar14th WHR closed at ask $78.10, and bid $78.30, and then after hours, quickly change to $77.72/$78.09,…
Drew
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