Stock Market Glossary
Bid
Highest price at which a buyer is willing to purchase an asset.
In brief: Highest price at which a buyer is willing to purchase an asset.
Meaning in practice
The bid (bid price) is the price at which you can sell immediately. The difference to the ask is the spread and at the same time a measure of market efficiency and liquidity.
Context for investors and traders
For traders, this term is most useful when preparing and executing an order. Its meaning depends on the venue, liquidity, time frame and order type. A single reading is not a reliable buy or sell decision.
How to use this in practice
Use the term first to describe the situation and add verifiable data: time frame, benchmark, costs and liquidity. Only then does it become an assessment that can be connected to an investment objective and risk budget.
What to keep in mind
Avoid false precision. Many market terms describe probabilities or historical patterns; they neither guarantee a return nor replace the review of a specific security.
