Bid Price

Bid price can be best defined as the highest price a buyer is willing to pay for a certain product or service in the financial marketplace. Traders can independently choose the price at which they are willing to purchase or sell an asset.

When the bid is significantly lower than that of the offered price, it is known as the ‘ask price.’ It is the price where people are willing to sell.  Subtracting these two values, you can get the bid-ask spread.

Looking at a trade order book, there are various bid prices on the buyer’s side, while the seller’s side consists of ask prices. The disparity between the highest bid price and minimum ask price is called the bid-ask spread.