Bid

### The bid is your exit price Investor.gov defines the bid as the highest price a buyer will pay for a specified number of shares at any given time. Two words in that definition do real work. *Highest*: the bid you see is the best of a stack of competing buy prices sitting underneath it. *Specified number*: the bid is only good for the size resting there. Sell more than that and the remainder fills at the next price down, and the one below that. So the bid is the honest mark on anything you own. The last trade printed is history. What you can actually get right now, if you hit sell at market, is the bid. ### A worked example, straight from the regulator The penny stock risk disclosure document reproduced in [FINRA's Notice 92-42](https://www.finra.org/rules-guidance/notices/92-42) uses a deliberately ugly quote to teach this. If the bid is $0.04 and the offer is $0.10, the spread is $0.06. Put $5,000 in at the $0.10 offer and the market maker's $0.04 bid values that holding at $2,000 the instant you own it. A $3,000 loss, and the price has not moved. Liquid markets make that gap small. They do not make it disappear. You buy at the ask and you sell at the bid, every single time, in every market. ### Where beginners get caught - Reading profit off the chart. Charts typically plot the bid, so a fresh long shows a small loss the moment it fills. Nothing broke. You paid the ask and you are being marked at the bid. - Treating the quote as a promise for any size. It is a promise for the size on offer. - Forgetting who is on the other side. Per the SEC's trade execution guidance, market makers stand ready to buy or sell at publicly quoted prices. They quote both sides, and the gap between them is how they are paid for standing there.