The difference between the price at which a market maker is willing to buy a security and the price at which the firm is willing to sell it (the difference between the bid and ask for a given security). Because each market maker can either buy or sell a stock at any given time, the spread represents the market maker's profit on each trade.

Market makers are limited in the size of spread they can offer. The bid/ask spread has a maximum size to prevent cheating and manipulation of stock prices.