bid the price

What Is a Bid?

A bid is an explicit statement of the price you are willing to pay to purchase an asset. The system records your bid and waits for it to be matched with a seller or accepted under auction rules.

In trading, the most common form of bidding is placing an order. When you enter a price and quantity on a crypto trading interface and confirm the submission, you are making a bid. The system lists your bid alongside other buy and sell orders to arrange trades. In auctions, bidding means responding to or increasing the current auction price until the auction ends.

How Does Bidding Work?

The mechanism behind bidding is determined by a matching engine or auction rules, which decide whether and when your bid is executed. If your bid matches a seller’s asking price and meets minimum trade size and fee conditions, the system executes the trade.

When you use a limit order to bid, you specify both price and quantity. The system only executes your order if the market can fulfill your set price. A limit order instructs the system to buy only at or below your specified price. In contrast, with a market order, you do not specify a price; instead, you buy immediately at the current market price, prioritizing execution speed over price control.

In auctions, an English auction features prices being bid up incrementally, with the highest bidder winning at the end. A Dutch auction starts with a high price that decreases over time until someone accepts the current price.

How to Place a Bid on Gate?

Bidding on Gate is straightforward. You can place bids via spot trading or contract trading interfaces by selecting either limit or market orders.

Step 1: Register and complete identity verification and funding. Create your account on Gate, set up security features, and deposit or transfer funds you intend to use.

Step 2: Select the trading market and pair. For example, choose BTC/USDT in the spot market, noting that this pair means buying BTC with USDT.

Step 3: Choose your bidding method. Select “Limit Order” to enter your desired price and quantity, or choose “Market Order” and enter the quantity to buy instantly at the best available price.

Step 4: Review fees and risks before submission. Check the “trading fee,” which is the service charge collected by the platform. Also consider “slippage,” which refers to the difference between your expected and actual execution price—this can occur during periods of high volatility or low order book depth.

Step 5: Submit and monitor your order status. Once submitted, a limit order enters the order book and waits to be filled; a market order attempts to execute immediately against available sell orders. Track your order’s status under “Orders” or “History.”

Should You Use Limit Orders or Market Orders for Bidding?

Whether to use a limit or market order depends on whether you value price control or fast execution.

If strict control over purchase cost is important to you, limit orders are preferable. They act as a ceiling for your maximum willingness to pay; if the price isn’t met, your order won’t execute—but this may mean waiting longer or missing the trade.

If immediate asset acquisition is more important, market orders are more suitable. They execute quickly at current market prices but may incur higher slippage during volatile periods, meaning your final price could be higher than expected.

On Gate, users seeking quick trades often use market orders, while those following planned purchases or employing grid strategies typically prefer limit orders to control costs by splitting purchases across different price levels.

How Does Bidding Work in NFT Auctions?

Bidding in NFT auctions involves responding to the current price or placing higher bids until the auction ends, at which point the highest bidder wins or the final price is determined by the auction rules.

In an English auction, each bid must exceed the current highest bid; the system records both time and amount, and the highest bidder at auction close wins the NFT. In a Dutch auction, prices decrease over time until someone accepts the current price.

When bidding on on-chain auction platforms, you typically need to provide an “on-chain signature,” which is a digital confirmation of your action using your wallet. You may also need to pay gas fees—the transaction costs required by blockchain networks. Gas fees can rise during network congestion, increasing your total bidding cost.

How Are Bids Related to the Order Book?

The order book is a system-generated list of buy and sell orders organized by price and time. Your bid appears on the buy side, opposing sellers’ asks.

Analyzing the order book can inform your bidding strategy: if there are many sell orders near your target price, this indicates significant resistance—your limit order may not fill quickly. If there are many buyers but few sellers at your price level, using a market order may result in higher slippage due to limited available volume.

The order book is often accompanied by a “depth chart,” which visually displays cumulative quantities at each price level—helping you judge where trades are more likely to execute smoothly or get stuck.

What Risks Should You Be Aware of When Bidding?

Bidding comes with risks such as price volatility, uncertain execution, and various costs. Prices can change rapidly after you place an order—limit orders might not fill promptly, while market orders could fill at higher-than-expected costs.

Slippage risk is significant. Slippage refers to actual execution prices deviating from expected prices, usually occurring during high volatility or when order book depth is thin. Ways to mitigate slippage include breaking large orders into smaller ones, using limit orders, and trading during periods of high liquidity.

Fee risk should not be overlooked. Platform trading fees affect your overall cost; for on-chain auctions or markets, gas fees fluctuate with network congestion and can raise your total cost.

Fund security is equally critical. Always use official channels and trusted wallets or platforms; watch out for phishing links and scams. On Gate, enabling two-factor authentication and withdrawal whitelists can further enhance account security.

What Are the Key Takeaways About Bidding?

The core of bidding lies in balancing price, quantity, and timing: limit orders focus on cost control; market orders prioritize execution speed. Order book and depth information help assess execution probability. In NFT auctions, bids follow auction-specific rules and fee dynamics. By aligning your goals and risk tolerance—choosing suitable bidding methods, splitting trades, monitoring fees, and securing your account—you can make bidding safer and better suited to your expectations.

FAQ

What Is the Difference Between Bid Price and Ask Price? Why Does It Matter?

The difference between the highest bid (buy) price and lowest ask (sell) price is known as the “spread.” The spread is a primary source of income for exchanges and market makers, as well as a hidden cost for traders. A narrower spread indicates better market liquidity and lower trading costs; wider spreads signal lower liquidity and increase the risk of slippage.

Why Are There Two Different Prices Displayed at the Same Time?

Buyers and sellers coexist in the market simultaneously. The bid price is the highest offer buyers are willing to pay; the ask price is the lowest amount sellers are willing to accept. The presence of both ensures continuous trading—there are always participants on both sides, so you don’t have to wait for an exact match before executing a trade.

Should Beginners on Gate Trade at Bid or Ask Prices?

This depends on your trading direction. If you want to buy a coin, you transact at the current ask price; if selling, you transact at the current bid price. Simply put: you pay a higher price when buying (ask) and receive a lower price when selling (bid). The difference between these prices constitutes your trading cost.

Can Bidding Really Save Money in Trading? How?

Bidding with limit orders can help you achieve better prices. For example, if a coin’s current ask is 10 USDT, you could bid 9.5 USDT; if the market drops to this level, your order fills—saving 0.5 USDT compared to an immediate purchase. However, this means your order might not fill immediately and may require waiting for suitable market conditions—making it best for traders who are not in a rush.

Are Bids Likely to Be Overrun or Missed During High Volatility?

Yes, limit orders are more prone to failure during extreme volatility. If prices fall sharply, your bid might be bypassed entirely and never executed; if prices surge rapidly, your sell order may find no buyers at your set level. This is a key risk of limit orders—during highly volatile markets, consider using market orders for guaranteed execution or closely monitor market trends to adjust your bids proactively.