What is the Bid Price?
What is often the difference between the bid and ask price?
Hi, I'm Russell Bailyn, a financial advisor in New York City, for About.com. Today we're going to discuss what is a bid price?The bid price is the highest price which a buyer is willing to pay for a stock or a bond. The bid price is often quoted along with an ask price, which is the stated price which a seller is willing to accept for that same stock or bond.It is often used in the context of investments, but could really apply to anything. Say for example you knitted a sweater and were hoping to sell it for $50. If someone makes a firm offer of $40 for it, that becomes their bid price and it's up to you, the seller, whether you want to lower your price or hold out for a higher bid. With stocks, the difference between the bid and ask price is often just a penny or two, which often lends itself to many trades being placed in a given day.Thank you for watching. To learn more, please visit About.com.
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