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Bid price

In a stock quote, the bid price is the price the buyer is willing to pay for a security. The listed bid price on an exchange is the highest price a buyer is willing to pay.

When the bid price is equal to the ask price a transaction occurs.

Expanded Definition

Anytime someone wants to buy a stock they can place a bid for that stock at any price through placing a limit order. The price they set is their bid price for the stock. A market for selling stock is created by many people listing the price at which they are willing to buy a stock. If someone places a market order to sell a stock they begin selling shares at the lowest bid price. When all the shares at that price are sold they begin selling shares at the next lowest bid price. This is how the price of shares goes down as people sell.

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