Spread is the tax you pay before you're right or wrong. Most people forget it exists. That's why they bleed small on every trade and can't figure out where the money went.
What spread is
At any moment, a stock has a bid (what someone will pay) and an ask (what someone will sell for). The gap between them is the spread. You buy at the ask. You sell at the bid. That gap is a cost you pay twice — once in, once out.
Squintz measures it as a percent of price. A $100 stock with a $0.10 spread is 0.10% wide. A $20 stock with the same $0.10 spread is 0.50% wide.
Why a tight spread matters
Two stocks both rally 2% on the same news. One has a 0.05% spread. The other has a 1% spread.
- Tight spread: enter at ask, exit at bid, net move captured ≈ 1.90%.
- Wide spread: enter at ask, exit at bid, net move captured ≈ 0%.
Same chart. Same thesis. Completely different P&L. A 0.10% spread beats a 2% spread on entry every single time — and it's the kind of difference that only shows up after you've already lost money the other way.
The S dimension in GRIPS
Squintz scores spread as the S in GRIPS — up to 20 points. Under 0.05% earns the full 20. Between 0.10% and 0.20% earns 14. Over 1% earns 1 point. The gate that fires a High-Conviction alert requires S ≥ 10, which rules out almost everything wider than 0.30%.
This is why the HC list is shorter than the mover list. Lots of stocks move. Fewer move cleanly.
Why this matters at the open
Spreads are widest in premarket and in the first minute after 9:30 AM. Market makers haven't calibrated yet. Liquidity is thin. You'll see spreads 5–10× their normal daytime width.
This is one of the reasons Squintz never trades premarket and only starts logging HC signals after 9:30. By the time you're acting, the book has had a minute to tighten, and your execution cost is back to normal.
What to look for on the card
If a signal card shows Spread 0.08%, you're fine. Under 0.20% is institutional-grade. Over 0.30% and the math starts working against you before the thesis even gets tested.
Cheap stocks, small caps, and after-hours tickers are where the wide spreads hide. Pretty chart + wide spread = the trap that ate last quarter's gains. GRIPS won't let you take that trade. That's the whole point.