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Bid
(Highest price a buyer will pay)
The Bid represents the highest price a buyer is willing to pay for a security at a given moment. Together with the Ask (lowest selling price), it forms the bid-ask spread that measures market liquidity.
In stock quotes, the bid appears first (e.g., $50.25 bid vs $50.30 ask). Market makers profit from the spread between these prices. Large bid sizes indicate strong buying interest. In auctions, the highest bid wins. Bid prices constantly fluctuate based on supply/demand - during high volatility, spreads widen significantly. Understanding bid dynamics is crucial for executing LMT orders effectively.
In stock quotes, the bid appears first (e.g., $50.25 bid vs $50.30 ask). Market makers profit from the spread between these prices. Large bid sizes indicate strong buying interest. In auctions, the highest bid wins. Bid prices constantly fluctuate based on supply/demand - during high volatility, spreads widen significantly. Understanding bid dynamics is crucial for executing LMT orders effectively.