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. What is the difference between the return on total assets and an interest rate?

    Return on total assets (ROTA) represents one of the profitability metrics. It is calculated by taking a company's earnings ... Read Full Answer >>
  2. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  3. When does the holding period on a stock dividend start?

    The holding period on a stock dividend typically begins the day after it is purchased. Understanding the holding period is ... Read Full Answer >>
  4. How can a company execute a tax-free spin-off?

    The two commonly used methods for doing a tax-free spinoff are either to distribute shares of the spinoff company to existing ... Read Full Answer >>
  5. How are American Depository Receipts (ADRs) priced?

    The price of an American depositary receipt (ADR) is determined by the bank or other financial institution that issues it. ... Read Full Answer >>
  6. How does a forward contract differ from a call option?

    Forward contracts and call options are different financial instruments that allow two parties to purchase or sell assets ... 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

    Impact of the Chinese Economy on the U.S. Economy

    The economic growth of China has been decreasing since 2010. What impact does this have on the US and the world economy?
  5. Investing

    The Number One Reason Why Most Traders Fail

    We show you the simple tools, availble to everyone, to succeed as an active trader: education, experience, charts, vision, and risk management systems.
  6. Investing

    Is There Still Opportunity in Japanese Stocks?

    Japanese stocks’ strong performance has prompted market watchers to question whether there’s still a case for adding exposure to the Land of the Rising Sun
  7. Credit & Loans

    Why Securities-Based Lending Became A Big Business

    Securities-based lending—using one's investments as collateral to secure a loan—has become big business for brokers and banks. Should we be concerned about its increasing popularity?
  8. Bonds & Fixed Income

    What are Floating-Rate Notes?

    A floating-rate note is a debt instrument with an interest rate that “floats,” or varies. They are also called floaters.
  9. Economics

    Do Transport Stocks Signal a U.S. Selloff?

    The Dow Jones Transportation Average index has underperformed the broader DJ Industrials Average, leading some market watchers to speculate a selloff.
  10. Investing Basics

    Explaining Counterparty Risk

    Counterparty risk is the risk that the other party in an agreement will default, or fail to live up to its contractual obligation.

You May Also Like

Hot Definitions
  1. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  2. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  3. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  4. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  5. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  6. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
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!