Dumb Questions

[murray t turtle]

1. I don't understand "the spread." I read that the spread is set by the exchanges, but I thought the spread was the most recent bid and ask price? How can it be set by the exchanges AND set by the bid and ask price of traders??

Thanks.

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Seller/market maker/ specialist..... sets the bid /ask= just like real estate;
buyer may or may not pay it/ so both agree, to execute a trade. Actually closing bid ask tends to be more valuable than most timely bid ask.
Don't confuse asking price[real estate/ or stocks/etfs] with a transaction= may or may not happen. Good question...………………………………………………………………………...…...…………………………………………...…………….