The bid price or simply the bid (German: Geldkurs, French: cours acheteur) is the rate or price which buyers are willing to pay for goods. It is also referred to as the buying price.
The bid price represents market demand. The term is widely used in the stock market, in which securities make up the goods being traded. In stock trading, the bid price shows what an interested party is willing to pay for securities.
The term is also common in currency trading (forex trading), where the bid price shows what a forex trader or bank is willing to pay for a currency.
The bid price is lower than the ask price. In trading jargon, the difference between the “bid” and the “ask” is known as the “spread”.
If there is a demand for a particular financial product, a stock for example, the highest price offered for that product will (in the German-speaking world) be accompanies by the letter “G”. This abbreviation shows that buyers are interested in a security, but sellers are not currently selling securities at that bid price.
More on this topic:
Online broker comparison: get free quotes now
Comparison of Swiss forex brokers
What is an ask price?
What is a bid-ask spread?
