Bidding Up - Securities

Underneath the stock prices that you can look up on any stock quoting site, there's a dynamic process of bids and asks. A bid is the amount someone is willing to pay for a stock. The ask is the amount the seller is willing to accept.

Regular folks just go to their Ameritrade accounts and pay the market price for the stock at any given time. Wall Street players get into the weeds with the bid/ask, trying to get the best possible price (when you're dealing with millions of dollars, those fractions of a cent per share start to add up).

The phrase "bidding up" has a couple connotations. In its more general sense, it just means something like "sending the stock higher," as in "investors are really bidding up shares of Apple today."

On a more technical level, the phrase can refer to a strategy for acquiring shares at a time when a stock is rising quickly. Basically, if you try to get too cute with your bid when a stock is skyrocketing, you could end up under-bidding the market and not getting any stock at all.

Bidding up means that you take the fact that the stock is rising into account when you place your bid, over-bidding to make sure you find a matching ask. Of course, this process helps fuel the upward rise in the stock, which can last until people finally start saying to themselves, "This is stupid. I'm just going to go buy bonds instead for a while."