# Bid ask spread

`kaal:entity:bid-ask-spread`

**Status.** derived

This node is assembled mechanically from the 2 claims that carry the concept tag `bid-ask-spread`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

2 claims across 1 works, 2022 to 2022.

**2022**

- [4033886-005](https://wulfkaal.github.io/claims/4033886-005) [empirical/evidenced] *(failure mode)* -- Dual listing narrows bid ask spreads in traditional markets by injecting liquidity, but crypto markets behave differently: price differences between two exchanges can reach upwards of five percent during peak trading times.
  > For traditional markets, when a security is dual- listed, we see the bid-ask spread decrease because additional liquidity is being injected into the market. This differs from the crypto market where the difference between the two exchanges can reach upwards of 5% during peak trading times.5
  Wulf A. Kaal, Samuel Evans, Hayley Howe, Digital Asset Valuation (2022). SSRN: https://ssrn.com/abstract=4033886
- [4033886-022](https://wulfkaal.github.io/claims/4033886-022) [mechanism/argued] *(failure mode)* -- When the bid ask spread grows too wide while trades occur at high volume, the market begins to lose liquidity and the asset's value starts to fall, forcing investors who unload positions to surrender unrealized gains.
  > Historically, in an exchange context, if the spread between bid and ask price becomes too large and trades are occurring at high volumes, the market will start to lose liquidity and the value of the asset will start to fall.
  Wulf A. Kaal, Samuel Evans, Hayley Howe, Digital Asset Valuation (2022). SSRN: https://ssrn.com/abstract=4033886

## Verify

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    curl -s https://wulfkaal.github.io/entities/bid-ask-spread.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.