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BidThe price a potential buyer is willing to pay for a security. Sometimes also used in the context of takeovers where one corporation is bidding for (trying to buy) another corporation. In trading, we have the bid-ask spread which is the difference between what buyers are willing to pay and what sellers are asking for in terms of price.Bid Similar MatchesStalking horse bidStalking horse bidIn bankruptcy proceedings, this refers to first bid for the companies assets. This is the bid to beat. If there are multiple bids, often there is a bankruptcy auction. Hit the bidHit the bidA dealer who agrees to sell at the bid price quoted by another dealer is said to "hit" that bid. Antithesis of take the offer. Cabinet bidCabinet bidA cabinet bid, which is a facility enabling holders of deep out-of-the-money options to close their positions at a nominal £1 per contract. Bid priceBid priceThe price at which a market maker will buy a security - which could be shares, warrants or, in the case of unit trusts, the price at which units will be bought back from their holders.Needless to say, a market maker's bid price is always lower than his 'offer price' which is the price at which he will sell you the security. The difference between the two is known as the 'spread'.Bid prices for shares are quoted on the Stock Exchange's SEAQ system, and displayed live on brokers' computer screens. The prices are only 'firm' for quantities within the 'normal market size' of a stock. So if you try to sell a large quantity of shares in a small AIM stock, you may find that you cannot get the bid price from the market maker because the normal market size quoted for that stock is below the quantity which you want to sell. Competitive biddingCompetitive biddingA securities offering process in which securities firms submit competing bids to the issuer for the securities the issuer wishes to sell. Further SuggestionsBidding through the marketBidding up Bid asked spread Bid to cover ratio Asked to bid or offer Bid away Bid/ask spread Bid price Bidding buyer Two tier bid bid offer spread Noncompetitive bid bid/offer spread Bid wanted London Interbank Bid Rate (LIBID) Competitive bidders |
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