when multiple buyers put in bids it can develop into a bidding war wherein two or more buyers place incrementally higher bids for example a firm may set an asking price of five thousand dollars on a good bidder a might make a bid of three thousand dollars bidder b may offer three thousand and five hundred dollars bidder a might counter with four thousand dollars 
eventually a price will be settled upon when a buyer makes an offer which their rivals are unwilling to top this is quite beneficial to the seller as it puts a second pressure on the buyers to pay a higher price than if there was a single prospective buyer quotes will often show the national best bid and offer nbbo from across all exchanges that a security is listed that means that the best bid price may come from a different exchange or location than the best offer in the context of stock trading the bid price refers to the highest amount of money a prospective buyer is willing to spend for it most quote prices as displayed by quote services and on stock tickers are the highest bid price available for a given good stock or commodity the ask or offer price displayed by said quote services corresponds directly to the lowest asking price for a given stock or commodity on the market in an options market bid prices can also be market makers if the market for the options contract is illiquid or lacks enough liquidity investors and traders that initiate a market order to buy will typically do so at the current ask price and sell at the current bid price limit orders in contrast allow investors and traders to place a buy order at the bid price or a sell order at the ask which could get them a better fill those looking to sell at the market price may be said to hit the bid bid sizein addition to the price that people are willing to buy the amount or volume bid for is also important for understanding the liquidity of a market bid sizes are typically displayed along with a level 1 quote if the quote indicates a bid price of 50 and a bid size of 500 that you can sell up to 500 shares at 50 bid size may be contrasted with the ask size where the ask size is the amount of a particular security that investors are offering to sell at the specified ask price investors interpret differences in the bid size and ask size as representing the supply and demand relationship for that security example of bid pricesuppose alex wants to buy shares in company abc the stock is trading in a range between 10 and 15 but alex is not willing to pay more than 12 for them so they place a limit order of 12 for abc s shares this is their bid price 