We propose a simple model that elucidates the generation of halo velocity bias. The fluid equation approximation is often adopted in modelling the evolution of the halo density field. In this approach, halos are often taken to be point particles even though in reality they are finite-sized objects. In this paper, we generalize the fluid equation approximation to halos to include the finite extent of halos by taking into account the halo profile. We compute the perturbation of the halo density and velocity field to second order and find that the profile correction gives rise to $k^2$ correction terms in Fourier space. These corrections are more important for velocity than for density. In particular, the profile correction generates $k^2$ correction term in the velocity bias and the correction terms do not decay away in the long term limit, but it is not constant. We model the halo profile evolution using the spherical collapse model. We also measure the evolution of proto-halo profile at various redshifts numerically. We find that the spherical collapse model gives a reasonable description of the numerical profile evolution. Static halo profile is often adopted in modelling halos in theories such as the excursion set theory. Our work highlights the importance of including the profile evolution in the calculations.

20 pages, 15 figures