"Yadda yadda yadda," said Alice Littles. She dropped the remote and left her sister watching the TV alone. "This is getting me Nowhere. And Nowhere is not where I want to be." In front of the mirror in the hallway, she stood. She stood and she stood and she thought, "Pictures. All those pictures. Boring. I'm abhoring boring. I need words. I need to invest my time more wisely."

Alice pulled her long blonde hair into a ponytail and grabbed her library card from the bowl on the table. Out the door she flew, down the street and past the drugstore. The one with the old-fashioned, marble-topped soda counter. The one she couldn't resist.

"Diet Pepsi Float, please." Up on a stool, she sipped and sipped and spun and spun, and had fun until she didn't. It was then that she saw the rabbit. A white rabbit, clad in a belled Fool's cap and multi-colored tights, sitting a couple of stools down, looking at his Swatch. "Oh dear! Oh dear! I shall be late!" he cried. And off his stool he hopped.

"Whoa, hold on," thought Alice. "A talking rabbit? In a jester's suit? And where'd he buy that great-looking Swatch? I need to start drinking some caffeine-free soda."

She ran out the door just in time to see the rabbit's ears disappearing beneath a manhole cover. "That rabbit's going Somewhere," she said aloud, taking stock of the situation. "And so will I."

Down, down, down she went. Down a dark hole, down past cupboards and bookshelves, slowly, falling so slowly she had time to read some of the titles. The Bonfire of the Vanities. Futures and You. "Motley Fool Investment Guide?" she read haltingly. "What's a motley?"

Down, down, down. And then -- thud. She landed atop a heap of leaves and dry sticks. The fall was over. Like the stock market does most of the time, she got up. Her investment adventure was beginning.

The rabbit was running down a tunnel. And on a three-legged glass table lay a telephone. She looked down -- a brokerage statement was in her hand. She knew what it was. She recognized it from the CNBC shows her Uncle Lewis watched endlessly.

"Hmmmmm." She looked at the statement. On the first line, she saw she owned 100 shares of Coke. On the second line, all that was written was six letters. SELL ME. "Well, I only drink Diet Pepsi anyway." She picked up the phone. It dialed itself.

"Make it quick," someone answered.

"What's the price of Coke?" she asked, emulating a phrase she'd often heard Uncle Lewis utter.

"Bottle or can?" the voice chided. "Just kidding. The bid or the ask?"

"Oh dear," thought Alice, "this is curious. What to do, what to do?" And so she asked, "Why are there two numbers?"

"The bid is the sell price, the ask is the buy price, and the spread," the voice said, sounding like Peter Lorre in a Bugs Bunny cartoon, "is what's in between."

Alice thought her mind was going to explode. Rabbit, bid, caffeine, ask, Elmer Fudd, spread? The only spread she knew was butter. What were these things? Who sets this spread? And what is its purpose?

1) The broker, to raise his commissions
2) The company, to increase their income
3) The Market Maker or Specialist, to generate commissions
4) The floor traders or runners to help increase their firm's commissions

The answer is 3) The Market Maker or Specialist, to generate commissions.

And so begins our subject for this week: spreads.

The prices your broker quotes you are called the bid and ask. The bid is the price you receive when you sell; the ask is the price you pay when you buy. The difference between the two is called the spread. It acts as a commission to the specialists, or market makers, trading that stock. They're the ones responsible for setting prices, accepting bids and offers (asks), and keeping the market in that stock running smoothly. They also trade at their own risk, and must make sure there's always a market in the stock.

Alice hung up the phone. This was too many words, too much too quick. She felt dizzy from her fall and, more than she was hungry to learn, she was thirsty.

Suddenly, she noticed a bottle laying beside the pile of sticks. It was not a brand she'd ever heard of. All it said on its side was, DRINK ME. And though it wasn't a Diet Pepsi, she gulped it down.

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