DEFINITION of 'Bid Tick'

An indication of whether the latest bid price is higher, lower or the same as the previous bid. Bid ticks track movements of bid prices in an open market for all placed bid offers, giving real-time information to traders and market participants as to the direction of bid prices over any given time period. In contrast, the ask tick would track ask requests over the same time period.

BREAKING DOWN 'Bid Tick'

The direction of the bid tick is important to institutional traders, who move large amounts of stock within a small period of time. Day traders also rely heavily on the direction of the bid tick when making their trade decisions. By monitoring bid ticks, traders can look for indications of how the market is expecting prices to move and the general spread between bid and ask quotes.

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RELATED FAQS
  1. 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 >>
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    The difference between these two market systems lies in what is displayed in the market in terms of orders and bid and ask ... Read Answer >>
  3. When is a buy limit order executed?

    Understand how buy limit orders work, and factors such as the bid-ask spread and market volatility that traders must consider ... Read Answer >>
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