This is a word that can be used in a number of different contexts but essentially its meaning can be summed up as “gap”..

So for example the difference between the price at which you can buy and sell a security is known as the “bid to offer spread”. Meanwhile the gap between the yield on a corporate fixed income security and a government security is known as a “credit spread”. As a rule of thumb in financial markets large spreads signal greater risk, especially where that spread is increasing or “widening”. Conversely “narrowing” spreads suggest that investors are willing to take on risk and are buying them, which tends to make the spread smaller.

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