Keep Your Eye on the Spread: What you need to know to trade ETFs

If you buy and sell an exchange-traded fund, you'll incur more than a trading commission. As with stocks, there's a difference between what a market maker will charge an ETF buyer and what that same dealer will pay a seller. The difference is the "bid-ask spread," and for investors, the smaller the spread, the lower the cost. As a rule, when an ETF sees little trading activity, bid-ask spreads can get wide.