Business and Personal Finance Dictionary

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• SPREAD
  
  1. noun — The difference between two prices or two rates. Different users have many different and highly specific usages of this term. For example, traders use spread to mean the difference between bid and asked prices for a security. Underwriters use spread to mean the difference between the price realized by the issuer and the price paid by the investor. Bank analysts use spread to mean the difference between the average rate paid on a bank’s assets and the average rate paid on the bank’s liabilities. (In connection with the use of the term spread by bank analysts, see net interest margin. In ALM, when spread is used as a noun it most often refers to the difference between two rates or yields. 2. noun — Financial analysts, credit analysts, and lenders use the term spread to refer to a financial statement that has been converted to a standard format for purposes of analysis or comparison. 3. verb — In ALM, most often means the disaggregation of a quantity. For example, the total amount of certificates of deposit on a bank’s balance sheet may be spread into different time interval buckets on a gap report. 4. verb — The process of reformatting financial statements for the purposes of analysis or comparison.
  
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