Bid Price
Market MechanicsQuick Definition
The highest price that a buyer is willing to pay for a security.
Detailed Explanation
The bid price represents the maximum price that a buyer is prepared to pay for a security at a given time. It's the price at which you can immediately sell your asset if you place a market order. The bid price is always lower than the ask price in a functioning market. Traders monitor bid prices closely as they indicate demand levels and can help in timing entry and exit points.
Real Trading Example
If a stock shows a bid price of $49.95 and an ask price of $50.00, you could immediately sell your shares for $49.95 each.