Definition of special bid

infrequently used method of purchasing a large block of stock on the New York Stock Exchange whereby a member firm, acting as a broker, matches the buy order of one client, usually an institution, with sell orders solicited from a number of other customers. It is the reverse of an exchange distribution. The member broker makes a fixed price offer, which is announced in advance on the consolidated tape. The bid cannot be lower than the last sale or the current regular market bid. Sellers of the stock pay no commissions; the buying customer pays both the selling and buying commissions. The transaction is completed during regular trading hours.