DEFINITION of 'Markdown'

The difference between the highest current bid price among broker-dealers in the market and the lower price that a dealer charges a customer.


The broker offers a lower price to try stimulate trading in hopes that they will make the money back on the extra commissions.

  1. Dealer

    A person or firm in the business of buying and selling securities ...
  2. Broker-Dealer

    A person or firm in the business of buying and selling securities, ...
  3. Markup

    The difference between an investment's lowest current offering ...
  4. Bid

    1. An offer made by an investor, a trader or a dealer to buy ...
  5. Bid Wanted

    An announcement by an investor who holds a security that he or ...
  6. Hindsight Bias

    A psychological phenomenon in which past events seem to be more ...
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