Bid-Ask-Spread

The bid-ask spread, also known as the 'spread', refers to the difference between the purchase and selling prices of an exchange-traded security. It is one of the implicit costs of trading.

Typically, investment instruments that are frequently traded, i.e. liquid, have lower spreads than those that are less liquid. When screening the ETF market, True Wealth always takes spreads into account and prefers the more liquid instrument, provided all the other relevant parameters are identical.