Stir things up around town

What Is Hit the Bid?

"Raise a ruckus around town" is a term utilized when a trader consents to sell at the bid price, the highest price a buyer will pay for a security or asset. The "bid-inquire" spread is the difference between the highest price that a buyer will pay and the most minimal price that a seller will acknowledge. An individual hoping to sell will raise a ruckus around town assuming that they wish to execute quickly costing that much.

Raise a ruckus around town can be stood out from "lift the offer."

How Hit the Bid Works

To stir things up around town is to sell a security to one more party at its bid price. This price addresses the highest price among contending offers for the security.

A trader will stir things up around town on the off chance that they think it is an appealing price, or on the other hand in the event that they must sell rapidly. To stir things up around town, the best method is to enter a market order to sell, albeit a sell limit order set at the current bid price is likewise conceivable to abstain from selling lower than the predominant bid.

Notwithstanding the price that an investor will buy, the amount or volume bid is likewise important for grasping the liquidity of a market. Bid sizes are ordinarily shown alongside a level 1 quote. In the event that the quote shows a bid price of $50 and a bid size of 500, you can sell up to 500 shares at $50. In the event that the best bid is for 100 shares and you have 500 to sell, raising a ruckus around town with a market order will fill the initial 100 shares costing that much, however 400 extra shares will be sold at dynamically lower prices until the order is filled.

Price quotes will frequently show the national best bid and offer (NBBO) from across all exchanges that a security is listed. That means that the best bid price might come from an alternate exchange or location.

Instance of Hitting the Bid

A portfolio manager has a junk bond to sell. The portfolio manager calls a junk bond broker to request bids for the junk bond. The broker calls prospective buyers and quickly makes a bid of $75 for the bond. The broker imparts this bid to the seller. The seller declines.

One more bid roll in from the market maker for $74, and the seller again declines. Afterward, the broker returns to the seller with a $74.50 bid. The seller hits the bid and sells it at the mentioned price. The opposite side of raising a ruckus around town is lifting the offer. In this scenario, the trader buying the junk bond from the portfolio manager is lifting the offer from the broker.

Features

• The bid is the highest price that a buyer will pay for a security.
• One will raise a ruckus around town on the off chance that they will sell at the best bid price utilizing a market order.
• "Raise a ruckus around town" means that a trader sells at the overarching bid price in a market.