Understanding ETFs

Tallying the total cost of owning an ETF

December 02, 2022

An illustration depicts a bid-ask spread on a horizontal line, with an ETF buyer on the left and seller on the right. Starting from the left is a range of bids, up to the best bid. Starting from the right is a range of asks, up to the best ask. The bid-ask spread is the distance between the best bid and the best ask. Also listed are three broad factors that can influence the spread. They are volume (turnover), volatility of the underlying securities, and liquidity of the underlying securities.
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