Alliance Trade
Why spreads widen during volatility 📊
A spread is the difference between the bid and ask price.
Bid is the highest price a buyer is currently willing to pay.
Ask is the lowest price a seller is currently willing to accept.
The gap between them is called the spread.
↗️ During calmer market conditions, that gap is often relatively tight. But when volatility rises, liquidity can become thinner and prices may change more quickly.
As a result, the distance between bid and ask can widen.
That matters because a wider spread can affect entry and exit prices, especially during fast market moves.
Understanding spread behavior helps you better read trading conditions, not just price direction.
More volatility can mean a wider gap between buyers and sellers.
A spread is the difference between the bid and ask price.
Bid is the highest price a buyer is currently willing to pay.
Ask is the lowest price a seller is currently willing to accept.
The gap between them is called the spread.
↗️ During calmer market conditions, that gap is often relatively tight. But when volatility rises, liquidity can become thinner and prices may change more quickly.
As a result, the distance between bid and ask can widen.
That matters because a wider spread can affect entry and exit prices, especially during fast market moves.
Understanding spread behavior helps you better read trading conditions, not just price direction.
More volatility can mean a wider gap between buyers and sellers.
