Bid Offer Spread

Definition of 'Bid Offer Spread'

The difference between the bid price (at which the holder can sell shares) and the offer price (at which the holder can buy shares). On occasion this can be quite large and depends on the equitys underlying price, liquidity, volatility and a number of other factors.
Many unit trusts also have a bid-offer spread and effectively this amounts to an extra exit charge when the investor sells.

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