The Bid Price

The bid price is the highest price that a trader is willing to pay to go long (buy a stock and wait for a higher price) at that moment. The price can change quickly as buyers and traders act throughout the globe. Those movements are known as current bids. current bids appear on the extent 2—a tool that indicates all present day bids and gives. The level 2 also suggests what number of stocks or contracts are being bid at each price.3

While a bid order is placed, there’s no assure that the trader setting the bid will acquire the number of shares, contracts, or lots that they want. Each transaction inside the market requires a purchaser and a vendor, so a person ought to promote to the bidder for the order to be filled and for the customer to acquire the shares.

Bid price example

If the current bid on a stock is $10.05, a dealer would possibly place a limit order to additionally buy shares for $10.05, or possibly a bit underneath that charge. If the bid is placed at $10.03, all different bids above it have to be filled before the price drops to $10.03 and potentially fills the $10.03 order.

You will narrow the bid-ask spread, or your order will hit the ask fee in case you region a bid above the contemporary bid (and the trade automatically takes place). The bid-ask spread is the variety of the bid rate and ask price. If the bid price were $12.01, and the ask price have been $12.03, the bid-ask spread would be $.02. If the current bid had been $12.01, and a dealer were to place a bid at $12.02, the bid-ask spread would be narrowed.