Bid offer spreadThe bid/offer spread is the difference between the buying (bid) and selling (offer) price of the same stock or currency transaction. In other words if the exchange rate between South African Rand (ZAR) and US Dollars (USD) was ZAR 6.50 = USD 1.00 and you wanted to sell ZAR and buy USD you would have to sell ZAR 6.55 to buy USD 1.00, at the same time if you wanted to buy ZAR for USD you would be able to buy ZAR 6.45 for USD 1.00. Both these transactions have a spread of ZAR 0.05 (5 cents) difference from the exchange rate and the rate which you will be given for your transaction. It would follow that the spread between the bid and offer prices would be ZAR 0.10 (10 cents).
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