Listen to a Business English Dialogue About Hit the bid
Kinsley: Hi Paisley, have you heard the term “hit the bid” in business and finance?
Paisley: No, I haven’t. What does it mean?
Kinsley: “Hit the bid” refers to the action of selling a security at the current highest price offered by a buyer in the market.
Paisley: Oh, so it’s like accepting the highest price available for selling a stock?
Kinsley: Exactly. It’s often used by traders to quickly execute a sell order and liquidate their position.
Paisley: Does “hit the bid” have any specific implications in trading?
Kinsley: Yes, it indicates a sense of urgency to sell, as the seller is willing to accept the highest available price without waiting for potentially higher offers.
Paisley: Can “hitting the bid” impact the market price of the security?
Kinsley: It can sometimes lead to downward pressure on the market price, especially if there are more sellers than buyers.
Paisley: So, hitting the bid can affect the supply and demand dynamics of the security?
Kinsley: Yes, it can influence the balance between supply and demand in the market, potentially driving prices lower.
Paisley: Are there any risks associated with hitting the bid?
Kinsley: One risk is that the seller may not get the best possible price for their security if they’re too eager to sell at the bid price.
Paisley: Thanks for explaining, Kinsley. “Hit the bid” sounds like an important concept in trading.
Kinsley: No problem, Paisley. It’s a common phrase used by traders to describe their selling actions in the market.