Skip to main content

Bid

An offer to purchase an asset from a person or business is referred to as a bid. At auctions and on numerous markets, including the stock market, bids are frequently placed by buyers. Companies that compete for project contracts may also submit bids. When placing a bid, a buyer must specify both the amount they are willing to pay for the item and the amount they are willing to spend on it. 1 A market maker's willingness to purchase a security at a particular price is referred to as a bid. However, market makers are also required to display an ask price, unlike retail purchasers.

Understanding Bids
There wouldn't be any kind of market without buyers and sellers. The ability to buy and sell assets is facilitated by each participant. Entities that offer their assets for sale are known as sellers. Customers are people who are interested in making a purchase. The stock market, actions, stores and any other type of marketplaces are the common places where buyers and sellers can meet and do business.
The market in which these items are sold will determine how bids are handled. Bids can be placed in person or online at an auction, while bids for stocks and other assets are typically placed by investors through their brokers. In ce occasion and for some stocks, the bidding process might be kept secret. With this method, bids are submitted sealed to prevent potential controversy.
In business, bids are submitted in order to secure lucrative contracts for certain projects. Packages are sent to prospective bidders as part of the bidding process.
Governments and major enterprises alike issue these type of contracts for building and maintenance projects across several sectors, including security, healthcare, education and infrastructures.


Bid and Ask: the Spread
Bid is related to demand, the need or want for something. Ask is related to supply, the availability of something. The difference between the two prices (bid and ask) is called the spread or bid-ask spread. The bid-ask spread is a good measure of the market's perception of supply and demand for a specific equity. 
Bids are made by buyers to purchase products and services they want and/or need, which includes anything of value, such as stocks, bonds, commodities, currencies, or other investments. 
The bid price is the highest price at which a buyer is willing to pay for purchasing a stock or any other security; the ask price is the lowest price at which a seller is willing to sell a stock or any other security. The spread is the quantitative difference between the bid and the ask.

Example of Bid-Ask Spread
For example the bid for XYZ stock is $10.25 and the ask is $10.28. The bid-ask spread is 3 cents ($0.03). When buying, the buyer pays the higher price: the ask price. When selling, the seller receives the lower price: the bid price. Therefore, the wider the spread the more costly is the transaction for the trader/investor.

Popular posts from this blog

What to Do When Market Is in the Toilet? Don't Trade OR Day Trade!

As we all know, 2022 has been a painful year, and it continues to be so. What works during a bearish market are a few strategies: shorts, inverse ETFs, holding cash positions and day trading. Today we take a look at ATXI and see how we day traded it. Watch this video to get the technicals. Good trading! Trading Risk Disclaimer All the information shared is provided for educational purposes only. Any trades placed upon reliance of SharperTrades, LLC are taken at your own risk for your own account. Past performance is no guarantee. While there is great potential for reward trading stocks, cryptos, commodities, options, forex and other trading securities, there is also substantial risk of loss. All trading operations involve high risks of losing your entire investment. You must therefore decide your own suitability to trade. Trading results can never be guaranteed. SharperTrades, LLC is not registered as an investment adviser with any federal or state regulatory agency. This is

Kal's Option Trade of the Week - UNG Short Call Vertical

This week we are going in with the Short Call Vertical strategy on UNG (Natural Gas ETF). The reason for choosing this option trade is that the Natural Gas market has been volatile and on a tear for the last few weeks. As contrarians, we will bet it slows down and turns around from here. Purely my assumption, but you can only trade on your own assumptions. :) Watch this video to get the trade details. Hope you enjoy it! Kal Trading Risk Disclaimer All the information shared is provided for educational purposes only. Any trades placed upon reliance of SharperTrades, LLC are taken at your own risk for your own account. Past performance is no guarantee. While there is great potential for reward trading stocks, cryptos, commodities, options, forex and other trading securities, there is also substantial risk of loss. All trading operations involve high risks of losing your entire investment. You must therefore decide your own suitability to trade. Trading results can neve

Bitcoin and Ethereum Funds: Two Unusual Activities That Could Result in a Big Move

Today we take a look at the technicals for Bitcoin and Ethereum. The crypto market has been quiet for several months.   On Friday we detected unusual dark pool activities (large block orders) in the Bitcoin Trust Fund and Ethereum Trust Fund, GBTC and ETHE respectively. When smart money know something, they place large orders in the dark pool exchanges, away from the public eye. By doing so, they are positioning themselves ahead of the crowds, in order to benefit from move that will follow, once the news or report is made public. However, dark pool activities   do not   tell us the direction of the next move. It only tell us that a large order(s) has been placed. Only a breakout (bullish) about a resistance level, or a breakdown (bearish) below a support level can confirm the direction of the next move. So, what can we expect next? Watch this video to find and to get the technical insights.  Good trading! Trading Risk Disclaimer All the information shared is provided for educational

10+ Stocks To Watch Moving Forward. Here Are the Technicals

Today we focus a several tickers including three swing trades that we initiated just a few days ago: ACCD, RBLX and TDOC. Create a watch list, watch this video to get the technicals, and manage your trades correctly. Featuring ACCD AGEN BBBY CHWY GROV LABU LCID LI MRNA MVIS PINS RAD RBLX RIVN SPCE TDOC Good trading! Trading Risk Disclaimer All the information shared is provided for educational purposes only. Any trades placed upon reliance of SharperTrades, LLC are taken at your own risk for your own account. Past performance is no guarantee. While there is great potential for reward trading stocks, cryptos, commodities, options, forex and other trading securities, there is also substantial risk of loss. All trading operations involve high risks of losing your entire investment. You must therefore decide your own suitability to trade. Trading results can never be guaranteed. SharperTrades, LLC is not registered as an investment adviser with any federal or state regulatory age