Definition
The bid is the highest price a buyer is currently willing to pay. When you sell with a market order, you receive the bid price.
Example
“The bid was stacking fast at $9.80 — three separate market makers showing size — and that support held for 20 minutes before the stock ripped.”
Detailed Explanation
The bid represents demand at a specific price. When you see "Bid: $15.20 x 500" on Level 2, it means someone (or multiple parties) want to buy 500 shares at $15.20. If you hit that bid with a market sell, you sell at $15.20 immediately. A rising bid price tells you buyers are willing to pay more — demand is increasing. A falling bid tells you buyers are stepping back.
Watching the bid on Level 2 during a momentum move can give you real-time information about buyer conviction. A strong momentum stock in play will have the bid getting hit repeatedly and refreshing higher — that's aggressive buying pressure. When the bid starts to pull away, disappears, or suddenly drops a level or two, it often signals that buyers are losing interest and a pullback or reversal may be coming.
Keep in mind that large bids can be spoofed — displayed to create the appearance of buying interest and then canceled before getting hit. This is more common in low-cap stocks. Rather than relying on a single large bid, watch the time-and-sales tape alongside Level 2 to see actual executed prints and confirm whether the apparent demand is real.