Market mechanics
How does the bid-ask spread affect my immediate entry price?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
The bid-ask spread is the gap between the highest price buyers will pay and the lowest price sellers will accept; a wider spread raises your effective cost to enter or exit a position immediately.
How it works
Illiquid or low-volume stocks typically have wider spreads, meaning a market order can execute meaningfully above the last traded price on a buy or below it on a sell.
An example
If a stock's bid is $9.90 and ask is $10.00, buying immediately at market effectively costs you $0.10 per share more than the midpoint price.
Risk & limitations
Using market orders on wide-spread, low-volume stocks can produce significant unexpected slippage versus the quoted last price.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.