An investor buys 200 ETF shares at an ask of $60 and sells at once at a bid of $59.50. What is the outcome?

1. An ETF quote carries two prices: the bid, the highest a buyer will pay, and the ask, the lowest a seller will accept. 2. A buyer pays the ask of $60 and a seller receives the bid of $59.50, so the spread is 50 cents a share. 3. Over 200 shares that spread is 200 multiplied by 50 cents, which is $100. 4. Buying and selling at once therefore leaves the investor $100 worse off before any commission. 5. The spread is a hidden cost, since it never appears as a line on a statement. 6. ETFs that are more liquid and more heavily traded carry tighter spreads. 7. An exchange trade does not settle at NAV, so the last option misreads the product entirely. _Source: US SEC Office of Investor Education and Advocacy, "Mutual Funds and ETFs: A Guide for Investors", section Transaction fees and costs for ETFs not reflected in the Fee Table_