Bid price

In general, the bid price is a price which is offered for a commodity, service, or contract.[1] In the context of transacting shares or exchange-traded funds on a stock exchange, the bid refers to the highest price a buyer is willing to spend for a certain security.[1][2]

The bid price is contrasted with the ask price, which is the minimum amount that someone is willing to sell a security for. The ask is higher than the bid, and the difference is called the "bid-ask spread". This spread is one of the costs of transacting on stock exchanges, separate from trading commissions.[3]

When selling shares using a market order on a stock exchange, you are expecting to get the current bid.

References

  1. 1 2 Investopedia, Bid Price, viewed January 5, 2019.
  2. ↑ TMX Money, Stock Market Terms, Bid, viewed January 5, 2019
  3. ↑ Canadian Couch Potato, The Hidden Cost of Bid-Ask Spreads, viewed January 5, 2019
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