A bid price is the price a prospective buyer is willing to pay for an . It is usually the highest priceWhat are value stocks? A value company is a company that app... More they are prepared to pay. It is often referred to as simply the bid.
The bid price can be affected by the bid size, which is in essence the size of the asset the trader wants to purchase. This could be the number of , or the desired value of a .
The bid price is not the same as the current price, which is the price that was paid for thesecurity the last time it was traded. A bid priceA bid price is the price a prospective buyer is willing to p... More could be lower or higher than the current priceWhat is price? The price is the measure of the value of good... More, depending on its perceived value in current marketWhat are value stocks? A value company is a company that app... More conditions.
The bid in a spread
The opposite of the bid price is the (the desired price by the seller) – the difference between the two is the bid/ask spread, or more commonly just the .
Bids in trading
In trading, the bid price is the highest price in the market shown on the quoteIn trading, quote is a combination of a bid and an ask pri... More services on a trading platform. Conversely, the ask priceAn ask price is the price a prospective seller wants from th... More will be lowest a seller is willing to accept if they sell.
Unsolicited bids
An unsolicited bid may be made by a trader or for something that is not actually for sale. This is most commonly seen in company takeovers when an investorAn investor is someone who spends capital with the expecta... More acquires enough sharesWhat are value stocks? A value company is a company that app... More to put them in a strong enough position to buy the whole company or a controlling share of it. The owners of the company or other asset may choose to reject the bid, although the bidder may then raise their bid price and keep raising it to the point that the owner decides to sell.
If more than one unsolicited bid is received, then this is called a bidding war. Each bidder will raise their bid price against those offered by the other bidders, similar to what happens in an auction. In a bidding war, the winning bidder runs the risk of overpaying, that is paying more than the purchased asset is actually worth and more than the ask price.
See also .
