What is the spread?
The spread is the gap between the price you can buy a share at right now (the ask) and the price you can sell it at (the bid). If you can buy at 100.20 and sell at 100.00, the spread is 0.20. It is a cost you pay without it appearing on any bill.
You buy at one price and can sell at the other. The gap is your invisible cost.
Why there are two prices
On the exchange, buyers and sellers each stand with their own price. Sellers want 100.20. Buyers will give 100.00. Nobody trades until someone gives in. If you want to buy now, you pay the sellers' price. If you want to sell now, you take the buyers'. The gap — the spread — is the price of making it happen immediately.
Buy and sell again a second later and you have lost the spread. At 0.2% that is nothing. At 3% it is a whole day's move.
When the spread is wide
- Small stocks with few trades: Buyers and sellers are far apart, so they stand far apart in price. Spreads of 1–5% are common.
- Outside normal hours: Few participants, wider spread.
- Turbulent days: Nobody wants to commit to a price, so everyone pulls back a little.
Large stocks like Novo Nordisk or a world ETF typically have spreads under 0.1%. That is one reason large funds are cheaper to own than small ones.
"Zero commission" is not free
Apps advertising zero commission typically make their money on the spread instead — giving you a slightly worse price than the market has. It is not cheating, but it is not free either. Compare the price you actually got with the market price in the same second.
The typical beginner's mistake
Buying and selling small, thinly traded stocks often. With a 3% spread the stock has to rise 3% just for you to break even — every single time. It eats the return without you seeing it.
How you see it in Kiggo
Kiggo does not trade for you and so does not show the spread on an individual trade — your bank or broker does that in the order window. But Kiggo's guide to choosing a broker under "Get started" explains how "zero commission" typically becomes spread and currency exchange instead, so you know what to look for.
Related terms
Frequently asked questions
How big is a normal spread?
For large, heavily traded stocks and ETFs: under 0.1%. For mid-sized: 0.2–0.5%. For small stocks with few trades: 1–5% and sometimes more. The smaller the company, the wider the spread.
Can I avoid the spread?
Partly. Place a limit order — "I will buy at 100.10 and no more" — and you may end up in the middle of the spread if a seller gives in. In return you are not certain the trade goes through.
Kiggo explains — Kiggo does not advise. We never tell you what to buy or sell, and key figures can only be compared between companies in the same industry. The decision is yours. Last updated 2026-09-07.
Written by Claus Frisch, founder of Kiggo. Not an adviser, not a bank — Kiggo explains, you decide.
