What is the purpose of the...

ajman

use of the "Cut Bid" in Heritage's auctions? It was used on one of the coins I was bidding on last night. The bid for the coin I was going for was at $1100 when it came on the block, Then the next bid was a cut bid for $1150 which was my max bid. Then it ended and I ended up winning the coin for $1150 + the BP. Is this a way for someone to try to snipe the coin so to speak? I don't understand the purpose of it.

SaorAlba

A cut bid is half of a bidding increment higher, in that case $50 instead of $100. It is a one time shot, then you cannot bid again. It really is just away for auction houses to make a bit more money on FAV fees.

ajman

Thanks.

PerryHall

<< <i>A cut bid is half of a bidding increment higher, in that case $50 instead of $100. It is a one time shot, then you cannot bid again. It really is just away for auction houses to make a bit more money on FAV fees. >>



I thought you could bid again but you couldn't cut-bid a second time on that particular lot.

ColonialCoinUnion

<< <i>It is a one time shot, then you cannot bid again. >>



That is not correct.

It used to be that way, but a couple of years ago they changed the bidding rules so that you can cut one time per lot. So if you cut the bid, and then are outbid, you may bid again at the full increment.

mozin

I always thought that cut bids were designed to make me the underbidder, but by only half an increment.

TomB

I've used the cut bid before and it is a useful strategy when you find yourself on the wrong end of a bidding increment. For the coin in question, it is likely that the others thought the coin was a good deal at $1,100 and was not a good deal at $1,200. However, the other bidders might have thought it acceptable, though not great, at $1,150. If the another bidder had the high bid at $1,100 then you can use the cut bid as a last ditch attempt to acquire the coin at a level that you feel comfortable. Conversely, if you had the high bid at $1,100 then someone else might try the cut bid in this scenario. The cut bid is a nice strategy, but since different bidders will value lots to different levels it makes its utility limited.