Spread [Securities] Law and Legal Definition

Spread refers to the monetary difference between the price an investor pays for a stock and the price at which the same investor could sell the stock. For instance, if a stock is quoted as $ 25 bid-$ 26 asked, the spread is $ 1.

In the options market, a "spread" (sometimes called a "straddle") is a position maintaining simultaneously both long and short options of the same type (i.e., puts or calls) or of different types in the same class. [Andros v. Commissioner, T.C. Memo 1996-133 (T.C. 1996)].