Hit The Bid

DEFINITION of 'Hit The Bid'

A buzzword used to describe an event where a broker agrees to sell at a bid price quoted by another broker. The broker is ultimately agreeing to sell a given stock at the highest price that another broker is willing to buy at.

BREAKING DOWN 'Hit The Bid'

For example, suppose a dealer is asking $20 for a particular security and another dealer's bid price for that same security is $19. If the dealer selling the security for $20 agrees to sell at the other dealer's bid price of $19, they are said to "hit the bid".

RELATED TERMS
  1. Bid Wanted In Competition - BWIC

    A situation where an institutional investor submits its bond ...
  2. Dealer

    A person or firm in the business of buying and selling securities ...
  3. Give Up

    A procedure in securities or commodities trading where the executing ...
  4. Association Of Futures Brokers ...

    An organization established by the major London futures exchanges ...
  5. Markup

    The difference between an investment's lowest current offering ...
  6. Executing Broker

    The broker or dealer that finalizes and processes an order on ...
Related Articles
  1. Professionals

    Gift Rule

    Broker dealers may not pay compensation to employees of other broker dealers. If a broker dealer wants to give a gift to an employee of another broker dealer, it must: Be valued at less than ...
  2. Professionals

    D. Accrued Interest

    Accrued Interest Most bonds pay interest semi-annually, based on their maturity date. An investor who wishes to sell a bond between the interest payment dates will be owed the interest that has ...
  3. Professionals

    C. Rule 200 Definitions and Order Marking

    Rule 200 updates the definition of who is determined to be long a security. As new derivatives and trading systems and strategies have been introduced, amendments to the short sale rules under ...
  4. Term

    How Bid Price Affects Liquidity

    The bid price is the amount a buyer will pay for a security.
  5. Forex

    How Forex Brokers Make Money

    Forex brokers set their prices based on commission, spread, or a combination of both. Traders have to be cautious in the thinly regulated forex market.
  6. Professionals

    Registration and Regulation of Brokers and Dealers

    FINRA/NASAA Series 26 Section 7 - Registration and Regulation of Brokers and Dealers. In this section manipulative, deceptive or fraudulent devices, discretionary accounts, fraudulent acts and ...
  7. Investing Basics

    How To Choose The Right Online Trading Broker

    The online broker market is becoming more competitive, but differences exist in services that can help traders choose the broker that’s right for them.
  8. Investing Basics

    Picking Your First Broker

    If you're a rookie investor, your first big investment decision should be an informed one.
  9. Professionals

    Introduction

    Securities that are not listed on any of the traditional exchanges trade over the counter or on the NASDAQ. NASDAQ stands for National Association of Securities Dealers Automated Quotation System. ...
  10. Professionals

    Broker Vs. Dealer

    The term broker dealer actually refers to the two capacities in which a firm may act when executing a transaction. When a firm is acting as a broker, it is acting as the customer’s agent ...
RELATED FAQS
  1. What do the bid and ask prices represent on a stock quote?

    Learn what the bid and ask prices mean in a stock quote. Find out what represents supply and demand in the stock market and ... Read Answer >>
  2. Does a broker always have to buy a stock if I want to sell it?

    There are certain times when a broker must purchase the stock that you are selling. For example, if the broker is a market ... Read Answer >>
  3. What is the difference between a broker and a market maker?

    A broker is an intermediary who has a license to buy and sell securities on a client's behalf. Stockbrokers coordinate contracts ... Read Answer >>
  4. I'm new to this. Can I sell or buy stock by myself?

    In order to buy stocks, you need the assistance of a stock broker since you cannot just phone up a company and ask to buy ... Read Answer >>
  5. My broker just sold securities out of my account without my permission. Is this legal?

    Your broker's actions are not legal unless he or she sold the securities under certain conditions. Let's look at the two ... Read Answer >>
  6. There are so many stockbrokers out there. How do I go about choosing the best one ...

    If you decide that you have the knowledge and experience to take on stock investing, or if you feel you would like to give ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center