Dealing spread
The dealing spread ('spread' or 'bid-offer' spread) is the difference between the price at which you can buy (offer) and the price at which you can sell (bid).
For example, Ben buys 1000 shares in a company at 130p per share (the 'offer' price). He pays 1000 x 130p=£1,300 in total (ignoring the cost of dealing).
If the spread is 5p, he could immediately sell the shares at 125p each (the 'bid' price). In other words, he would make an immediate loss of 1000 x 5p=£50. The shares must rise by at least 5p per share before he can make a profit on them.
The situation described above is a simple example only. Figures such as the dealing spread and the cost of dealing vary.
See share price
