To negotiate the bid price, you can follow a strategy called "showing your hand" or leveraging the "Show or Fill Rule." Here's how it works:
- Identify the Mid-Point: Find the mid-point of the current bid-ask spread.
- Place a Limit Order: Instead of placing a market order, which would execute at the published bid price, place a limit order slightly below the mid-point, expressing your willingness to buy at a specific price.
- Trigger the Show or Fill Rule: By placing a limit order below the current bid price, you are effectively improving the market by offering a lower price than the current highest bid. This action triggers the Show or Fill Rule, which requires market makers to display any orders that improve the current bid price.
- Negotiate for Better Terms: If your limit order is executed, you have successfully negotiated a better bid price. If not, you can adjust your limit order and continue the negotiation process.
Remember, negotiating the bid price works best in environments with high liquidity and significant bid-ask spreads.