Glossary
Bid and ask
The bid is the highest price a buyer will currently pay; the ask is the lowest price a seller will accept. The gap between them is the spread. On an exchange that spread is the effective cost of trading, the market's own version of the margin a sportsbook builds into its odds.
Every exchange market has two live prices at once, and they are almost never the same number. The bid is what you can sell into right now, because it is the best standing offer to buy from you. The ask is what you can buy at right now, because it is the cheapest standing offer to sell to you. Buyers want to pay less, sellers want to receive more, so the ask always sits above the bid.
The distance between them is the spread, and it is not free. If a contract shows a bid of 47 cents and an ask of 50 cents, buying and immediately selling would cost you three cents on the round trip even if nothing moved. That built-in gap is the exchange analog of the vig a sportsbook bakes into its lines. Nobody hands it to you as a separate fee; it is simply the price of crossing the market.
Tight spreads versus wide ones
A one-cent spread on a heavily traded contract barely dents your edge. A ten-cent spread on a quiet market can quietly erase it. Spread width tracks how much interest sits in the order book: busy markets compete the gap down, thin ones let it yawn open. Checking the spread before you trade tells you what participation is really costing you.