Spread

[seanmould14]

Hi, I've seen the use of the term 'spread' on a few of the threads, but no explanation of what it means exactly. My questions are;

1. When people refer to this, what exactly do they mean?

2. Ive seen it said ' a spread of 3 on the lay and 5 on the back' , again what does this mean?

3. What is meant by a 'thin spread'?.

4. How is the 'spread' calculated?

Thankyou for reading.

Darren.

[doncht]

3. What is meant by a 'thin spread'?.

Looking for an answer to that too. If possible, can anyone also please provide a sample scenario?

[Euler]

The spread is the distance between two touch prices.

So say we have a back price of 4.10 and a lay price of 4.30 the spread is 0.20

Or if you look at the top of a market you see a book percentage.

If the back book is traded at 101.5 and the lay side 98.5 you have a spread of 3%

[Euler]

If the market is 'thin' it generally means there isn't much money in it.

[seanmould14]

Thankyou for clearing that up for me.