how hit the bid works
to hit the bid is to sell a security to another party at its bid price this price represents the highest price among competing offers for the security a trader will hit the bid if they think it is an attractive price or if they must sell quickly to hit the bid the most effective method is to enter a market order to sell although a sell limit order set at the current bid price is also possible to avoid selling lower than the prevailing bid in addition to the price that an investor is willing to buy the amount or volume bid 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 you can sell up to 500 shares at 50 if the best bid is for 100 shares and you have 500 to sell hitting the bid with a market order will fill the first 100 shares at that price but the additional 400 shares will be sold at progressively lower prices until the order is filled price 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 example of hitting the bida portfolio manager has a junk bond to sell the portfolio manager calls a junk bond broker to solicit bids for the junk bond the broker calls prospective buyers and immediately creates a bid of 75 for the bond the broker communicates this bid to the seller the seller declines another bid comes in from the market maker for 74 and the seller again declines later the broker goes back to the seller with a 74 50 bid the seller hits the bid and sells it at the requested price the other side of hitting the bid is lifting the offer in this scenario the trader buying the junk bond from the portfolio manager is lifting the offer from the broker investopedia does not provide tax investment or financial services and advice the information is presented without consideration of the investment objectives risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors investing involves risk including the possible loss of principal 