In financial markets, the bid and asked prices represent the highest price a buyer is willing to pay for an asset and the lowest price a seller is willing to accept, respectively. The difference between these two prices is known as the spread.
The base interest rate defined in the loan agreement, to which the spread is added in order to establish the interest rate payable on a variable-rate loan.
The term 'spread' can refer to several different financial concepts, including the difference between buying and selling prices, the diversity in a portfolio, and a strategy in commodity futures.
