Why Did My Proxy Bid Jump More Than an Increment?
by sir_snipes_alot

Even the most seasoned of eBay bidders are sometimes confused and concerned when they enter a proxy bid, and the current bid amount jumps more than the stated bid increment. Some will even ask or think that there has been a malfunction of the bidding software. This is almost always not the case.

There are two possible reasons for this having occurred. The first, and most likely is that there was another bidder already bidding on the auction item, who was also using a proxy bid. You can never know what another bidder's proxy amount was. When a new proxy bid is entered it must first compete with the prior high bid - this occurs in nano-seconds, and is not seen or recorded in the item's bid history. Once the two proxy bids are compared, the highest proxy bid will be entered as the new leading bid, at one increment above the other bidders maximum proxy amount.

The second situation where a proxy bid may jump quite high, either with or without the presence of another bidder, is if the auction item is listed as a reserve auction.

A reserve auction is an auction where the seller has listed the item at a lower starting price, but has placed a value on the auction item at which they are not willing to sell below. You can think of this as a "proxy bid" placed by the seller.

If you bid on a reserve auction item and your proxy bid is equal to the reserve price - the current bid price will jump to the amount of the seller's reserve. If your proxy bid is higher than the seller's reserve price - your bid will jump to the reserve price, and any remaining proxy amounts will be held back to fight off any future bids.