Question: Financial Exchanges Consider a situation when the same stock is traded at two different exchanges, Exchange 1 (EX1) and Exchange 2 (EX2). For EX1

(red), the ask price is a and the bid price is b.

Financial Exchanges Consider a situation when the same stock is traded at two different exchanges, Exchange 1 (EX1) and Exchange 2 (EX2). For EX1 (red), the ask price is a and the bid price is b. For EX2 (blue), the ask price is a2 and the bid price is b. The following diagram depicts four different scenarios (Options A - D) for the relationship between bid-ask spreads for the stock at two exchanges.

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