A bid price is the highest price that a buyer is willing to pay for a security, asset, commodity, service, or contract. It is the price at which a trader can sell an underlying asset to a broker or market maker. The bid price is one of the two prices quoted when trading financial assets, the other being the offer price. The difference between the bid price and the offer price is known as the spread, which is the cost that a trader will incur in order to open a position. The bid price is generally arrived at through a process of negotiation between the seller and a single buyer or multiple buyers. The bid price is contrasted with the sell (ask or offer) price, which is the amount a seller is willing to sell a security for. The bid price will almost always be lower than the ask or “offer,” price, and the difference between the two is called the bid-ask spread.