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Spread

In relation to share, bond and currency markets, spread is the difference between the bid price and the ask (offer) price, incorporating both an estimate of demand and potential profit for the seller. In relation to unit trusts, spread is the difference between the allocation of redemption price of units, as a result of transaction costs incurred in buying and selling the underlying securities which make up the value of the trust. In relation to option markets, spread is the holding of a long position and an offsetting short position, usually in contracts with the same underlying security or asset.

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