Bid

A bid is an offer made by an investor, trader, or institution to purchase a security, commodity, or asset at a specified price. The bid price represents the highest price a buyer is willing to pay for a particular asset at a given time. In financial markets, bids are crucial in determining the market price of securities, as they reflect the demand side of the market. The bid is typically contrasted with the ask price, which is the lowest price a seller is willing to accept. The difference between the bid and ask prices is known as the bid-ask spread.

Example

If a trader offers to buy shares of a stock at $50 per share, this $50 is the bid price. Sellers can then decide whether to accept the bid or wait for a higher offer.