Bid
The price at which a buyer is willing to purchase a security.
The bid price is the highest price a buyer will pay. You receive the bid when selling, and it is always lower than the ask by the size of the spread.
The bid price is the highest price a buyer is willing to pay for a security. When you want to sell, you receive the bid price. The bid is always lower than the ask, with the difference being the spread.
How It Works
- Quote: 1.1000 (bid) / 1.1002 (ask)
- Sell orders execute at the bid
- Bid = left-hand side of quote
- Market makers buy at bid, sell at ask
Trading Tips
Watch bid when closing long positions
Bid can drop sharply in panic selling
Wider spreads mean lower bids relative to ask
Bid Example
Say EUR/USD quotes 1.0850 / 1.0852. The bid is 1.0850, the highest price buyers will pay you right now. Hit sell on one lot and 1.0850 is your fill, with the 2-pip spread already spent.
How Traders Use Bid
Sellers get bid, buyers pay ask, and the gap between them is every cost conversation you will ever have. When backtesting shorts, fill assumptions must use the bid side, or the results lie.
Related Terms
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