The highest quoted bid and the lowest offer price among competing market makers in a security trading on the Nasdaq market. Taobiz explains Inside Market This is another term for the market maker spread.
The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded. In an IPO, the issuer obtains the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), the best offering price and the time to bring it to market. Also referred to as a "public offering". Watch: Initial Public Offering (IPO) Taobiz explains Initial Public Offering - IPO IPOs can be a risky investment. For the individual investor, it is tough to predict what the stock will do on its initial day of trading and in the near future because there is often little historical data with which to analyze the company. Also, most IPOs are of companies going through a transitory growth period, which are subject to additional uncertainty regarding their future values.
1. The date at which a security is first made available for public purchase. The initial offering date is set during the underwriting process. For stocks, this marks the date of the initial public offering and the beginning of a quiet period, when insiders and underwriters cannot issue earnings forecasts or research reports on the company. This term also refers to the initial offering of shares in other assets, such as mutual funds and unit investment trusts (UITs). Taobiz explains Initial Offering Date Historically, stocks have been underpriced leading up to the initial offering date. This can create pent-up demand for shares on the first day of trading, and creates profit potential for those who can subscribe to the issue before the initial offering date. However, buying on the date of offering can be very risky. Because only a small percentage of the outstanding shares (typically less than 25%) are eligible to trade on the first day, share prices can become volatile and more difficult to anticipate. This same problem does not typically occur with shares of most other assets. Mutual fund or UIT shares are based on a portfolio of established securities with values that are already known in the market.
A stock that an individual obtains through an inheritance after the original holder has died. The cost basis for the stock is based on the market value of the security upon the donor's death. If the stock value increased during the time it was held by the deceased, its cost basis is "stepped up" when ownership is transferred . Taobiz explains Inherited Stock Unlike gifted securities, for tax purposes, the security is not valued at its original cost basis. only the appreciation from the day of inheritance is subject to a capital gains tax.
A debt or equity issuance in which the purchaser does not pay the full value of the issue up front. In the purchase of an installment receipt, an initial payment is made to the issuer at the time the issue closes; the remaining balance must be paid in installments, usually within a two-year period . Although the purchaser has not paid the full value of the issue, he or she is still entitled to full voting rights and dividends. Taobiz explains Installment Receipt This type of debt or equity financing is most attractive to issuers that are unable to get an attractive price for more traditional financing techniques, such as a traditional initial public offering (IPO). Installment receipts often trade on an exchange, in which case, whoever purchases them assumes liability for any installments that may remain. This type of financing is mainly seen in Canada.
Any person who has knowledge of, or access to, valuable nonpublic information about a corporation. Taobiz explains Insider Examples of an insider include the directors and officers of a company. Stockholders who own more than 10% of equity in a company are also insiders.
A dividend payment made before a company's AGM and final financial statements. This declared dividend usually accompanies the company's interim financial statements. Taobiz explains Interim Dividend his is used more frequently in the United Kingdom, where it is usual for dividend payments to occur semi-annually. The interim dividend is generally the smaller of the 2 payments made to shareholders.
1. The charge for the privilege of borrowing money, typically expressed as an annual percentage rate. 2. The amount of ownership a stockholder has in a company, usually expressed as a percentage. Interest is commonly calculated using one of two methods: simple interest calculation, or compound interest calculation. Taobiz explains Interest 1. Lenders make money from interest, borrowers pay it. 2. Someone who holds more than 5-10% of the stock in a company is said to hold significant interest.