Spread With A Lot Of Choice

Spread With A Lot Of Choice

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In finance, a spread refers to the difference between two prices, rates, or yields One of the most common types is the bid-ask spread, which refers to the gap between the bid (from buyers) and the ask (from sellers) prices of a security or asset Spread can also refer to the difference in a trading position – the gap between a short position (that is, selling) in one futures contract or currency and a long position (that is, buying) in another

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The middle rate, also called mid and mid-market rate, is the exchange rate between a currency's bid and ask rates in the foreign exchange market.

Spread betting refers to speculating on the direction of a financial market without actually owning the underlying security.

A two-way quote indicates the current bid price and current ask price of a security; it is more informative than the usual last-trade quote.

A futures spread is an arbitrage technique in which a trader takes two positions on a commodity to capitalize on a discrepancy in price.

Quotation is a common term that refers to the highest bid price for a security or commodity and the lowest ask price available for the same asset.

A bid-ask spread is the amount by which the ask price exceeds the bid price for an asset in the market.

Credit Spread vs. Debit Spread: What's the Difference?

After-Hours Trading: Bid and Ask Quote Disparity

Option-Adjusted vs. Zero-Volatility Spread: What's the Difference?

Understanding the Numbers After Bid/Ask Prices

A Breakdown on How the Stock Market Works

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A spread can have several meanings in finance. Generally, the spread refers to the difference between two prices, rates, or yields . In one of the most common definitions, the spread is the gap between the bid and the ask prices of a security or asset, like a stock, bond , or commodity. This is known as a bid-ask spread.

Spread can also refer to the difference in a trading position – the gap between a short position (that is, selling) in one futures contract or currency and a long position (that is, buying) in another. This is officially known as a spread trade.

In underwriting , the spread can mean the difference between the amount paid to the issuer of a security and the price paid by the investor for that security—that is, the cost an underwriter pays to buy an issue, compared to the price at which the underwriter sells it to the public.

In lending, the spread can also refer to the price a borrower pays above a benchmark yield to get a loan. If the prime interest rate is 3%, for example, and a borrower gets a mortgage charging a 5% rate, the spread is 2%.

The bid-ask spread is also known as the bid-offer spread and buy-sell. This sort of asset spread is influenced by a number of factors:

For securities like futures contracts , options, currency pairs, and stocks, the bid-offer spread is the difference between the prices given for an immediate order—the ask—and an immediate sale – the bid. For a stock option , the spread would be the difference between the strike price and the market value .

One of the uses of the bid-ask spread is to measure the liquidity of the market and the size of the transaction cost of the stock. For example, on Jan. 11, 2022, the bid price for Alphabet Inc., Google's parent company, was $2,790.86 and the ask price was $2,795.47. 1 The spread is $4.61. This indicates that Alphabet is a highly liquid stock, with considerable trading volume.

The spread trade is also called the relative value trade. Spread trades are the act of purchasing one security and selling another related security as a unit. Usually, spread trades are done with options or futures contracts. These trades are executed to produce an overall net trade with a positive value called the spread.

Spreads are priced as a unit or as pairs in future exchanges to ensure the simultaneous buying and selling of a security. Doing so eliminates execution risk wherein one part of the pair executes but another part fails.

The yield spread is also called the credit spread . The yield spread shows the difference between the quoted rates of return between two different investment vehicles. These vehicles usually differ regarding credit quality .

Some analysts refer to the yield spread as the “yield spread of X over Y.” This is usually the yearly percentage return on investment of one financial instrument minus the annual percentage return on investment of another.

To discount a security’s price and match it to the current market price, the yield spread must be added to a benchmark yield curve . This adjusted price is called an option-adjusted spread . This is usually used for mortgage-backed securities (MBS), bonds, interest rate derivatives, and options. For securities with cash flows that are separate from future interest rate movements, the option-adjusted spread becomes the same as the Z-spread.

The Z-spread is also called the yield curve spread and zero-volatility spread . The Z-spread is used for mortgage-backed securities. It is the spread that results from zero-coupon treasury yield curves which are needed for discounting pre-determined cash flow schedule to reach its current market price. This kind of spread is also used in credit default swaps (CDS) to measure credit spread.

A yield spread is the difference between yields on differing debt instruments of varying maturities, credit ratings, issuer, or risk level, calculated by deducting the yield of one instrument from the other. This difference is most often expressed in basis points (bps) or percentage points. Yield spreads are commonly quoted in terms of one yield versus that of U.S. Treasuries, where it is called the credit spread.
The option-adjusted spread (OAS) measures the difference in yield between a bond with an embedded option, such as an MBS, with the yield on Treasuries. It is more accurate than simply comparing a bond’s yield to maturity to a benchmark. By separately analyzing the security into a bond and the embedded option, analysts can determine whether the investment is worthwhile at a given price.
The zero-volatility spread (Z-spread) is the constant spread that makes the price of a security equal to the present value of its cash flows when added to the yield at each point on the spot rate Treasury curve where cash flow is received. It can tell the investor the bond's current value plus its cash flows at these points. The spread is used by analysts and investors to discover discrepancies in a bond's price.
Yahoo! Finance. " Alphabet Inc. (GOOGL) ." Accessed Jan. 11, 2022.

( of light, liquid, color, etc. ) To diffuse via a source

The process of becoming greater in size, extent, volume, amount, or number
“Removal of a tree killed by pine wilt is essential to limit the spread of this disease.”
A large and impressively elaborate meal
“There was a nice spread at the party with everything from little nibbles to large sandwiches and pizzas.”
“The merchant had an impressive spread of trinkets for sale.”
The extent, width, or area covered by something
“The spread of income in the population ranged from virtually nothing to billions.”
“The park has a large spread of green where we can indulge in some fun and games.”
“The sheets were rather soiled, but she covered the stains with a patchwork spread .”
Two facing pages in a book, newspaper or magazine
“The magazine had a double-page spread on what Kim Kardashian had for a pre-dinner snack.”
A large tract of land used to raise livestock
“Can't wait till I get my own spread and won't have to put up with Joe Aguirre's nonsense no more.”
An advancement in progress or development
An increase in quantity, size, or degree
The act of propagating or spreading of ideas, beliefs etc.
A list of dishes available in a restaurant
An edible spread used to flavor foods
A large area of barren, typically uninhabited land
A liquid substance used to form a smooth, shiny coating on food
The title (normally in a large and distinctive font) of a newspaper at the top of the front page
The act or an instance of penetrating
Communication whose purpose is to influence potential customers about products and services
An advance made into a place or area, literally or figuratively
A soft, fatty foodstuff made by churning the cream of milk (generally cow's milk)
The process of the formation and growth of cities
A small dish of food or a drink taken before a meal or the main course of a meal to stimulate one's appetite
The positioning or placement of people or things
The structure or composition of something
A sudden, widespread occurrence of an undesirable phenomenon
A floor covering made from thick woven fabric
The state, condition or measure of being contagious
( of a material ) To stretch or open out
“The caretakers would painstakingly spread the mural across the gallery's wall.”
To gradually reach, or cause to reach, a wider area or more people
“From here the virus would spread to neighboring regions via the very roads and railways these construction workers were building.”
To communicate a message or information to a wide audience
“He would use every opportunity at his disposal to spread his message of peace and love.”
“I like to spread a good amount of butter on my raisin toast each morning.”
To develop, increase or grow rapidly
“The retail service area would spread up and down the West Coast from San Francisco to Seattle and inland as far as Bend.”
To diverge into two or more separate paths
“I have heard the legend of a man who would spread the Red Sea in two.”
To be displayed to its fullest extent
“From the summit, we could see the spectacular valley that spread out below us.”
To distribute or be distributed loosely or evenly
“Piles of junk were spread all over the hoarder's apartment.”
( of light, liquid, color, etc. ) To diffuse via a source
“The sun would spread light and warmth throughout the little town as it arose.”
“The course would spread over a five-week period.”
To spread or permeate through an area or space
To convince someone to join such a cause or organization or support such a position, to recruit someone
To become known (as of a fact or information)
To drip or dribble down vertically (in drops)
To come from or have its origin from
To place (a piece of cloth) somewhere casually
To preserve from extinction or oblivion
To spread or extend outwards from, or as if from, a central point
To free from breaks, curves, or bumps
To linger behind or wander from a main line or part
To retreat from something frightening or dangerous
Spread or dispersed over a wide area
Extending or growing in an outward direction or movement

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Spread With A Lot Of Choice

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