Bid

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A bid is the highest price a market maker is willing to pay at a given time for a specified security or contract.[1]

Market makers make money on the difference between the bid price and the ask price. That difference is called the "spread."[2]

Bid size is the number of shares offered for purchase at the bid price, often expressed in terms of hundreds of shares. Traders sometimes try to use the bid size and ask size to measure impending short term upward or downward pressure on the stock's price. This can work for stocks on exchanges such as NYSE and AMEX, but is far less useful on Nasdaq, which uses market makers ready to buy and sell shares, rather than specialists who balance books of buy and sell orders.[3]


References[edit]

  1. Glossary:"Bid". CME.
  2. Glossary:"Bid" Price. SEC.
  3. bid size. InvestorWords.com.