Bidder

AAA

DEFINITION of 'Bidder'

The party offering to buy an asset from a seller at a specific price. A bidder can be an individual or organization, and the potential purchase can be part of a multiparty transaction or an auction. In most cases, the party selling the asset chooses the bidder who offers the highest price.

INVESTOPEDIA EXPLAINS 'Bidder'

Bidders are an essential component of a functioning market. By indicating the amount they are willing to pay for something, bidders signal to the market whether demand is increasing or decreasing. High demand may prompt more sellers to enter the market, and can increase the price that sellers are able to garner.

In the case of the stock market, investors bid on how much they are willing to pay for a company’s shares. Share price volatility depends on the number of buyers and sellers looking to conduct a transaction, with the presence of more buyers than sellers often leading to an increase in price.

The market for mergers and acquisitions is also a bidding market. Companies negotiate how much they are willing to pay to acquire another business, which in turn can reject bids if they find the price too low.

RELATED TERMS
  1. Treasury Direct

    The online market where investors can purchase federal government ...
  2. Auction House

    A company that facilitates the buying and selling of assets, ...
  3. Treasury Yield

    The return on investment, expressed as a percentage, on the debt ...
  4. Auction Market

    A market in which buyers enter competitive bids and sellers enter ...
  5. 30-Year Treasury

    A U.S. Treasury debt obligation that has a maturity of 30 years. ...
  6. Certificates Of Accrual On Treasury ...

    Issued by the U.S. Treasury and stripped by a financial intermediary, ...
RELATED FAQS
  1. Is there a way to include intangible assets in book-to-market ratio calculations?

    The book-to-market ratio is used in fundamental analysis to identify whether a company's securities are overvalued or undervalued. ... Read Full Answer >>
  2. Under what circumstances would someone enter into a repurchase agreement?

    In finance, a repurchase agreement represents a contract between two parties, where one party sells a security to the other ... Read Full Answer >>
  3. What types of corporations would be expected to have higher growth rates than more ...

    Investors looking for corporations with higher-than-average growth rates have several factors to consider. Although younger ... Read Full Answer >>
  4. What tax implications are there for parties involved with a reverse repurchase agreement?

    A reverse repurchase agreement – sometimes referred to as a reverse repo – is the purchase of an asset with a simultaneous ... Read Full Answer >>
  5. What happens if a software glitch fails to execute the strike price I set?

    If you've ever suffered the frustrating experience of having an order not filled or had a strike price fail to execute because ... Read Full Answer >>
  6. Are so-called self-offering and self-management covered by "Financial Instruments ...

    As the Financial Services Agency (FSA) explains, self-offering of interests in collective investment schemes falls under ... Read Full Answer >>
Related Articles
  1. Bonds & Fixed Income

    The Treasury And The Federal Reserve

    Find out how these two agencies create policies to stimulate the economy in tough economic times.
  2. Home & Auto

    Should You Buy A House At Auction?

    The traditional real estate market isn't the only place to conduct your home search. Auctions also bring many buying opportunities.
  3. Credit & Loans

    Treasury International Capital

    This important economic indicator can affect interest rates, dollar value and the bond markets.
  4. Investing Basics

    What Does Spot Price Mean?

    Spot price is the current price at which a security may be bought or sold.
  5. Investing Basics

    How Does a Dividend Reinvestment Plan Work?

    A dividend reinvestment plan allows investors to use their dividends to purchase more shares of the corporation’s stock, rather than receiving payment.
  6. Investing

    What’s Driving Markets Today

    While U.S. stocks managed to eke out modest gains last week, it wasn’t without some violent swings along the way.
  7. Investing

    Why Higher Rates Could Be Good News For Consumers

    While rates remain extraordinarily low by historical standards, in the last few months we have witnessed a modest change in the environment.
  8. Investing Basics

    What's a Reverse Repurchase Agreement?

    A reverse repurchase agreement is the buyer side of a repurchase agreement (also called a repo).
  9. Investing Basics

    What is a Premium Bond?

    A premium bond is one that trades above its face or nominal amount.
  10. Investing Basics

    Explaining Non-Controlling Interest

    Technically, a non-controlling interest is any percentage of ownership that is less than 50% of a company’s voting equity.

You May Also Like

Hot Definitions
  1. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  2. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  3. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  4. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
  5. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating ...
  6. Risk-Return Tradeoff

    The principle that potential return rises with an increase in risk. Low levels of uncertainty (low-risk) are associated with ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!