What is a bid?
When an investor wants to buy some stock, they make a bid, stating both how much stock they want to buy and the maximum price they’re willing to pay for it.
The bid is not the same as the ask price, which is the minimum price a seller will accept.
When an investor wants to buy some stock, they make a bid, stating both how much stock they want to buy and the price they're willing to pay for it. The bid is a counterpart to the ask price, which is the price a seller is willing to accept. Note that the bid or ask price isn't necessarily the minimum or maximum price available, and one investor may offer multiple asks at different prices.
Where have you heard about bids?
Bids and ask prices play a key role in the exchange of securities like shares. They help potential buyers and sellers to make their price expectations clear, and you can find both prices quoted when you look to trade. The highest price being offered for a security at a given time is known as the best bid.
What you need to know about bids...
The gap between a bid price and an ask price, the bid-ask spread, is an index of how popular the stock is compared to how much is available to sell. A narrower spread suggests a security that is very in demand, as well as greater potential liquidity. Firms called market makers help to bridge gaps between bid and ask prices by offering both to buy and sell in specific securities.