What It Means
Bid price is the highest price a buyer is currently willing to pay for a stock or option. It sits opposite the ask price, which is the lowest price a seller will accept — together they form the bid-ask spread shown on every order screen.
How It Works
When you place a market sell order, you get filled near the bid price, not the ask. That's the flip side of buying at the ask: a seller accepts slightly less than a buyer would have to pay, and the gap between the two is the spread — the market's built-in cost of trading immediately rather than waiting to be matched at your own price.
Example
If HDFC Bank shows a bid of ₹1,648 and an ask of ₹1,649.20, a market sell order fills near ₹1,648 — a rupee-plus less than a buyer placing a market order would pay. On a liquid large-cap stock like this, that gap stays small; on a thinly traded small-cap or a far out-of-the-money option, the same gap can run into several rupees.