To: Savant who wrote (82 ) 4/11/1999 2:14:00 PM From: brec Read Replies (1) | Respond to
When I want to sell something, I should be able to sell it to an interested buyer How are you going to meet this buyer? Won't you go to a market , i.e., a meeting of people for traffic by ... purchase and sale , i.e., a congregation of buyers and other sellers? (The meeting place may be electronic, but that doesn't matter.) And what is a buyer, but someone who has a bid? And what is a seller, but someone who asks a price? The difference between the lowest asking price and the highest bid is the spread. A spread is inherent in the existence of a market for a fungible such as a security. If all the buyers and sellers find an agreeable counterpart and trade, then everyone goes home and there is no more market; as long as some buyers and sellers remain, there is a market and a spread.market , as I use the term, and what would be most precisely denoted by marketplace . A marketplace might be empty of people at any given time, and be merely a place that potential participants know about as a destination for buying and selling activity. By market I mean an existing meeting of buyers and sellers, not merely a place.Can there be a difference between the buyer's price and the seller's price? Sure, that's called haggling, bargaining, dickering, ... No, the difference is called the spread. Note the distinction in meaning between a difference in price on one hand and haggling, bargaining, dickering on the other. The latter are forms of communication in which the spread is established and in some cases narrowed.
