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Kenneth Chang

Investment Dictionary


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Bid Price

 

Bid price is the highest price at which buyer is willing to buy specific amount of securities. Investors often leave their buy orders through their brokerage account while each buy order that stays in the exchange has its price, but the highest bid is going to be a bid price for a particular security at that moment. If liquidity is high, the bid price changes very fast.

 

The bid price must be lower than ask price in the stock exchange, and the spread between bid and ask prices is the ‘bid-ask spread’. For the sellers bid price means that any investor can sell that security at a bid price immediately (if it is trading hours) without leaving his ask offer in the stock exchange, but the quantity of those available securities may be not very large. The bid price sometimes is called just a ‘bid’.

 

 






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