Investment Glossary

The bid price is the highest price a buyer is willing to pay for a security. “Bid” and “ask” prices are fundamental market concepts, as they detail the exact amount at which securities can be bought and sold at any point in time. It should be noted that the current price is not the price for which securities can be purchased, but is instead the price at which the shares last traded hands. To determine the price at which a security can be bought, it’s necessary to look at the bid and ask prices because they will often differ from the current price. See also: “ask” price.