I am currently researching the mechanics of CFD trading and, being new to this, am a bit confused about certain terms. I understand that the "bid" is the price that the CFD is sold at and the "offer" is the price at which it is bought. I also understand that the difference between the two is the "spread".
What I don't get is, how can the bid and the offer be different? If I am a seller, I will sell it for the offer, and I have to buy it at the offer price. It seems that I only care about the bid when I sell it back, because then I sell it back at the bid.
Wouldn't it make more sense to say that the offer is the price at which the seller sells the CFD's in the initial transaction and the bid is the price at which the trader/buyer sells it back. And since the values will change, either rising or falling, the prices will also change.
In short, I guess i am trying to understand the function of the spread to begin with.
Thank you in advance