Hockey Stick Bidding

DEFINITION of 'Hockey Stick Bidding'

An anti-competitive bidding practice in which a market participant (or trader) offers an extremely high price for a small portion of a good.

The name derives from the price curve of this practice, which resembles a hockey stick.

BREAKING DOWN 'Hockey Stick Bidding'

This is considered to be a fraudulent practice of pushing up prices. Market participants submit offers at extremely high prices because they know that the demand for their good is sure to be high.

A good example of this occurred during the California energy crisis of 2001. Energy traders knew that California would need all available power and would be willing to pay any price to get it.

RELATED TERMS
  1. Hockey Stick Chart

    A line chart in which a sharp increase or decrease occurs over ...
  2. Best Practices

    A set of guidelines, ethics or ideas that represent the most ...
  3. Federal Trade Commission - FTC

    An independent federal agency whose main goals are to protect ...
  4. Microeconomic Pricing Model

    A model of the way prices are set within a market for a given ...
  5. Competitive Bid Option

    A form of the commercial loan syndication where banks submit ...
  6. Bid Whacker

    A slang term for an investor who sells shares at or below the ...
Related Articles
  1. Term

    Negotiating the Bid

    A bid is an offer investors make to buy a security.
  2. Investing

    More Gains Ahead From The High-Yielder Up 40%

    Most people know the name Wayne Gretzky. For years he was nearly universally regarded as the best hockey player in the world. Yet his astounding success had very little to do with superior athletic ...
  3. Term

    How Bid Price Affects Liquidity

    The bid price is the amount a buyer will pay for a security.
  4. Economics

    What is a Bell Curve?

    The bell curve is the most common type of graphed data distribution.
  5. Economics

    What Is Supply?

    Supply is the amount of goods a producer is willing to produce at a given price, and is one of the most basic concepts in economics.
  6. Economics

    Understanding The Treasury Yield Curve Rates

    Treasury yield curves are a leading indicator for the future state of the economy and interest rates.
  7. Bonds & Fixed Income

    Yield Curve

    Learn more about how this curve is used to predict changes in economic output and growth.
  8. Your Practice

    How Advisors Can Get the Best Price for Their Firm

    Selling your financial advisory practice is one of the most important transactions you will complete. Here's how to be sure you're getting the best price.
  9. Mutual Funds & ETFs

    Top 3 Muni California Mutual Funds

    Discover analyses of the top three California municipal bond mutual funds, and learn about their characteristics, historical performance and suitability.
  10. Economics

    Effects of OIS Discounting for Derivative Traders

    The use of OIS discounting has important implications for derivative valuations and could positively or negatively impact a trader's profit or loss.
RELATED FAQS
  1. Why is a "hockey stick bid" considered fraudulent?

    A "hockey stick bid" is a pricing strategy in which a supplier will spike the price of a commodity considerably beyond the ... Read Answer >>
  2. How do day traders capture profits from the difference between bid and ask prices?

    Discover how day traders capture profits from the difference between bid and ask spreads. These spreads blow out during volatile ... Read Answer >>
  3. What do the numbers that follow the bid and ask numbers in stock quotes represent? ...

    When looking at stock quotes, there are numbers following the bid and ask prices for a particular stock. These numbers usually ... Read Answer >>
  4. Why are the term structure of interest rates indicative of future interest rates?

    Learn why economists believe the term structure for interest rates reflects investor expectations for future interest rates ... Read Answer >>
  5. What is the difference between term structure and a yield curve?

    Understand the difference between the term structure of interest rates and a yield curve, if any. Learn what the yield curve ... Read Answer >>
  6. What does the yield curve actually predict?

    Find out what an inverted yield curve represents, how it has performed as a leading indicator and why it appears to hold ... Read Answer >>
Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center