Definition
The best bid sits at the top of the buy side because it offers sellers the highest displayed price. It is a venue-specific quote, not necessarily the highest bid across all exchanges. Several orders can share that price, with the displayed quantity representing their combined available amount.
How It Works
A market sell normally matches the best bid first under the venue’s matching rules. If a hypothetical best bid is 100 for 2 units, selling 3 units may fill 2 at 100 and the remainder at a lower bid. The best bid therefore applies only to available quantity at that moment.
Key Considerations
Quotes can change or be canceled before an order arrives. The best bid is not the last traded price and does not determine the sale price for an unlimited quantity. Alongside the best ask, it defines the quoted spread; market depth is needed to estimate execution for a larger sell.