Spread

In by Simon Brown

Spread refers to the difference in the price someone is willing to pay for a share and the price at which someone is willing to sell. With ordinary shares, the difference is determined by the number of shares for sale and the number of buyers interested in buying the share. Spread is considered an investment expense, because the value of your investment immediately reflects the spread. Let’s say you bought a share at R100, but you change your mind and decide to sell it immediately. If the spread is 1%, buyers are only willing to pay R99 for your R100 share. The bigger the spread, the longer it takes for you to really begin earning money on your investment.

You can learn more about this here: ETF: Spread as ETF cost