What does the expression “Crossing the Spread” mean, and when/where would it be used? Thanks.
Found an explanation here:
Market makers, many of which may be employed by brokerages, offer to sell securities at a given price (the ask price) and will also bid to purchase securities at a given price (the bid price). When an investor initiates a trade they will accept one of these two prices depending on whether they wish to buy the security (ask price) or sell the security (bid price). The difference between these two, the spread, is the principal transaction cost of trading (outside commissions), and it is collected by the market maker through the natural flow or processing orders at the bid and ask prices. This is what financial brokerages mean when they state that their revenues are derived from traders “crossing the spread.”
The difference between the bid and the ask is called the spread . A trader crosses the spread when he offers to buy at the ask, i.e., he offers to pay the sellers’ price, which is above what other buyers are willing to pay.
I would advise you to study in detail the concepts that you will use in your work. This is very useful to you.