Narrowing The Spread

closing the spread between the bid and asked prices of a security as a result of bidding and offering by market makers and specialists in a security. For example, a stock’s bid price—the most anyone is willing to pay—may be $10 a share, and the asked price—the lowest price at which anyone will sell—may be $10 3 ⁄ 4 . If a broker or market maker offers to buy shares at $10 1 ⁄ 4, while the asked price remains at $10 3 ⁄ 4, the spread has effectively been narrowed.

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