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Buy and sell price.

Guest Billy999


Guest Billy999

Why is the buy price and sell price so hugely different? Eg buy for 33p sell for 18p.how is this an attractive investment offer? Sorry im new to this so please dont hate me if its a stupid question.

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Guest Billy999
30 minutes ago, Caseynotes said:

Hi @Billy999,  a wide spread usually signifies very low liquidity (availability to either buy or sell). The market doesn't set out to offer attractiveness, it's just what's available on the buy and sell side. Be very wary of stocks with high spreads, once you own them you may find they are very difficult to off-load should the need arise.

Thank you.


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Thanks Caseynotes. As you said this is basically down to the underlying market. On shares we have a fixed percentage spread around the bid/offer, however if this is large then it will be large on the IG platform (as you can see below, the cash has a spread of 83 points which then feeds into the IG prices)

Liquidity, risk, and lack of market makers (on specific stock) are generally the factors behind this. Liquidity providers (not IG but the underlying market) are basically increasing their costs to counteract higher risks. 

2018-10-29 08_53_18-Engagement audit.docx - Word.png

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