Tuesday, August 29, 2017 6:41:11 PM
For example, suppose a dealer is asking $20 for a particular security and another dealer's bid price for that same security is $19. If the dealer selling the security for $20 agrees to sell at the other dealer's bid price of $19, they are said to "hit the bid".
So there's the “bid” price, which is the price another investor would be willing to buy shares of a stock for. And then there's the “ask” price, which is the price you'd have to pay if you wanted to buy the stock. The ask price is generally higher than the bid price, but sometimes they can be virtually the same.
Another way to explain it would be:
A bid price is the highest price that a buyer (i.e., bidder) is willing to pay for a security (stock). It is usually referred to simply as the "bid". In bid and ask, the bid price stands in contrast to the ask price or "offer", and the difference between the two is called the bid–ask spread or simply "the spread"
hope that helped!
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