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Author: Admin | 2025-04-28
TL;DR Bid-ask spread is the difference between the lowest price asked for an asset and the highest price bid. Liquid assets like bitcoin have a smaller spread than assets with less liquidity and trading volume.Slippage occurs when a trade settles for an average price that is different than what was initially requested. It often happens when executing market orders. If there's not enough liquidity to complete your order or the market is volatile, the final order price may change. To combat slippage with low-liquidity assets, you can try to split your order into smaller parts.IntroductionWhen you buy and sell assets on a crypto exchange, the market prices are directly related to supply and demand. Apart from the price, other important factors to consider are trading volume, market liquidity, and order types. Depending on the market conditions and the order types you use, you won't always get the price you want for a trade.There is a constant negotiation between buyers and sellers that creates a spread between the two sides (bid-ask spread). Depending on the amount of an asset you want to trade and its volatility, you might also encounter slippage (more on this later). So to avoid any surprises, getting some basic knowledge of an exchange's order book will go a long way.What is bid-ask spread?The bid-ask spread is the difference between the highest bid price and the lowest ask price of an order book. In traditional markets, the spread is often created by the market makers or broker liquidity providers. In crypto markets, the spread is a result of the difference between limit orders from buyers and sellers.If you want to make an instant market price purchase, you need to accept the lowest ask price from a seller. If you'd like to make an instant sale, you'll take the
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