Glossary

Bid-Ask Spread

By Rohan Fernandes, Founder · Updated 2026-08-21 · Educational reference, not investment advice

The bid-ask spread is the gap between the highest price buyers bid and the lowest price sellers offer. It is the toll paid on every entry and exit, and on multi-leg structures it compounds per leg, which makes quote width a first-class entry screen.

A practical screen caps the spread as a fraction of the mid price, for example refusing candidates whose short strike trades wider than 15% of mid. Width also degrades every measure computed from quotes: implied volatility, and therefore POP and expected move, are only as precise as the mid they are solved from. Wide markets do not just cost more; they know less.

Educational reference. Options Scanner is a software tool. It is not a broker-dealer, an investment adviser, or a fiduciary, and nothing on this page is investment advice or a recommendation to buy or sell any security. Options involve risk and are not suitable for every investor; read the Characteristics and Risks of Standardized Options before trading. Examples use hypothetical numbers for illustration only.