In trading, a bidder is an investor which makes a purchase offer (a bid) to a party which is selling and asset. The term is widely used in relation to auctions, securities exchanges and commodities exchanges.

In an auction, bidders state how much they are willing to pay for an asset in turn, with the asset being sold to the bidder which is willing to pay the most for it.

Stock exchanges and other securities exchanges operate on a similar principle. The exchange displays the best current offer from an asset holder looking to sell their assets, and the highest current bid from an investor looking to buy those assets.

A seller may choose to accept a bid and sell their assets at the bid price, and a buyer may choose to accept an offer and buy assets at the offer price. Typically, bids are lower than offers because bidders want to buy at the lowest possible price and sellers want to sell at the highest possible price.

More on this topic:
Swiss online trading platform comparison
Bid-ask spreads explained
National best bid and offer explained

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