Alex Berenson Hares Quotations

The lower spreads mean lower costs for investors, because Nasdaq investors generally do not trade directly with one another. Instead, they usually buy and sell from market-makers, brokerage firms that flip shares between buyers and sellers and keep the spread for themselves.

Bigger spreads mean bigger gaps between what buyers pay and sellers receive. For example, a spread of 10 cents a share means that the buyer pays $100 more for 1,000 shares than the seller receives.

For decades, Wall Street has charged companies a standard fee of 7 percent to sell their shares to the public.

As the Nasdaq soared in 1999 and early 2000, demand for many offerings far exceeded the supply of shares available at the initial offering price.

Corporate executives often buy or sell shares in their companies, and stocks rarely rise or fall significantly when those transactions are reported.