What is a spread?

Spread in most common sense means the difference between two prices or similar measurements. In the stock market as an example a spread is the difference highest price asked and a lowest bid. In case of government bonds a spread can be calculated between yields of securities having the same investment percent but no the same maturity dates. For example if on a long term treasury bond the yield is 8% and on a treasury bill is 5% then the spread equals 3%. Also spread can be calculated between securities which have the same maturity dates but have different investment qualities. The term spread it can be also used to illustrate the price difference between two products from the same class. For example the wheat the October and the January contract which represent the cost of carry and this might change according to the wheat market.