Definition Of 'Bid Priceing'

DEFINITION OF 'BID PRICEING'

The price a buyer is willing to pay for a security. This is one part of the bid with the other being the bid size, which details the amount of shares the investor is willing to purchase at the bid price. The opposite of the bid is the ask price, which is the price a seller is looking to get for his or her shares.

A bid price is the highest price that a buyer (i.e., bidder) is willing to pay for a good. It is usually referred to simply as the "bid."

In bid and ask, the bid price stands in contrast to the ask price or "offer", and the difference between the two is called the bid/ask spread.

An unsolicited bid or purchase offer is when a person or company receives a bid even though they are not looking to sell. A bidding war is said to occur when a large number of bids are placed in rapid succession by two or more entities, especially when the price paid is much greater than the ask price, or greater than the first bid in the case of unsolicited bidding.

In the context of stock trading on a stock exchange, the bid price is the highest price a buyer of a stock is willing to pay for a share of that given stock. The bid price displayed in most quote services is the highest bid price in the market. The ask or offer price on the other hand is the lowest price a seller of a particular stock is willing to sell a share of that given stock. The ask or offer price displayed is the lowest ask/offer price in the market (Stock market).

The bid price is the highest price that a prospective buyer is willing to pay for a specific security. The "ask price," is the lowest price acceptable to a prospective seller of the same security. The highest bid and lowest offer are quoted on most major exchanges, and the difference between the two prices is called the "bid-ask spread."