On Tuesday, the bid-ask spread on Spain's 10-year note hit roughly 0.12 percentage point.
In March, all 18 CIO marks had moved to the extreme boundaries of the bid-ask spread.
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"We don't make money on the bid-ask spread, " insists Kyle Vann, Entergy-Koch's chief executive.
Bid-ask spreads of 25% are not unknown, says L.E. (Tripp) Dunman, Aquila's director of weather marketing.
For example, the bid-ask spread on German 10-year bonds is less than 0.01 percentage point.
In the 1990s it was a playground for securities dealers manipulating bid-ask spreads.
Prices may range far from their closing NASDAQ prices, with wider bid-ask spreads.
"We don't make money on the bid-ask spread, " says Kyle Vann, Entergy-Koch's CEO.
Item No. 2 is the bid-ask spread, expressed as a per-year percentage expense.
Brokers push them, he says, because the pricing is opaque and most customers will never see a bid-ask spread.
If the ETF is little traded the bid-ask spread will be high, and a reasonably small order may move the market.
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Electronic trading has shortened settlement times, lowered bid-ask prices for frequently traded stocks, reduced brokerage costs and improved the flow of information.
Early last week, bid-ask spreads on European government bonds from Spain and Italy touched some of their widest levels of the year, said Tradeweb.
But that assumes the FTT will not simply be passed on to end-customers, either directly by affected institutions or as reduced liquidity leads to wider bid-ask spreads.
Advisors typically collect higher fees for trading strategies, brokers collect more commissions, exchanges earn a fee from each transaction, and market makers gorge themselves on the bid-ask spread.
One issue for investors, according to Mr. Rosenbluth, is that this two-year-old fund is thinly traded and can have a wide bid-ask spread (the difference between the prices potential buyers "bid" to acquire shares and the prices potential sellers "ask" to part with theirs).
The best way to protect yourself is to use limit orders when placing an order to buy or sell a stock or an exchange-traded fund. (See How Your Buy and Sell Orders Get Filled for more.) Look at the bid-ask spread and set your price limit at the bid for selling a stock and at the ask for buying a stock.
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The new rules on stock quotations get at the ability of investors to get in the middle of the spread between the bid and ask prices quoted by market- makers.
The cost of buying a second-hand Treasury at Fidelity is half the spread between bid and ask prices.
This can be particularly challenging if your stop order triggers during a pre-market session when spreads or the difference between the bid and the ask are wide.
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