The bid/ask spread is the difference between the highest price a buyer is willing to pay (the bid) and the lowest price a seller is willing to accept (the ask) for a security or asset. It reflects the liquidity of the market: a narrower spread typically indicates a more liquid market with higher trading volumes, while a wider spread suggests lower liquidity and potentially higher transaction costs for traders. The spread can fluctuate based on market conditions, volatility, and the specific characteristics of the asset being traded.