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Underwrite
UnderwriteTo guarantee to buy or find buyers for a security issue; to take on the risk of paying for losses in accordance with the conditions of an insurance contract. RELATED TERMS-------------------------------------- Guarantee The assumption of responsibility for payment of a debt or performance of some obligation if the liable party fails to perform to expectations. Security Piece of paper that proves ownership of stocks, bonds, and other investments. Issue To offer securities for sale to the general public; a quantity of securities offered to the public. Take 1) To agree to buy. A dealer or customer who agrees to buy at another dealer's offered price is said to take the offer. 2) Euro bankers speak of taking deposits rather than buying money. Risk The possibility of loss; the amount that one may lose when investing. Insurance A contract in which payment of premiums covers the insured against something which may, or may not occur. Contract A term of reference describing a unit of trading for a financial or commodity future. Also, the actual bilateral agreement between the buyer and seller of a transaction as defined by an exchange. SIMILAR TERMS-------------------------------------- Under the belt Long position in a stock. Underbanked When an originating investment banker cannot find enough firms to underwrite a new issue. Underbooked Describes limited interest by prospective buyers in a new issue of a security during the preoffering registration period. Undercapitalized A company that does net have sufficient share capital to support its volume of trading. UNDERCOVERWEAR Limited UNDERCOVERWEAR Limited is a large Australian company in the field of consumer durables and apparel. Their Australian Stock Exchange (ASX) code is UCW. Underfunded pension plan A pension plan that has a negative surplus (i.e., liabilities exceed assets). Underground economy All employment and transactions on which tax is not paid, black economy. Underinvestment problem The mirror image of the asset substitution problem, in that stockholders refuse to invest in low-risk assets to avoid shifting wealth from themselves to debt holders. Underlying 1) In derivatives, the security that must be delivered when a derivative contract, such as a put or call option, is exercised. 2) In equities, the common stock that must be delivered when a warrant is exercised, or when a convertible bond or convertible preferred share is converted to common stock. Underlying asset The security or property or loan agreement that an option gives the option holder the right to buy or to sell. Underlying debt Municipal bonds issued by government entities but under the control of larger government entities and for which the larger entity shares the credit responsibility. Underlying futures contract A futures contract that supports an option on that future, which is executed if the option is exercised . Underlying instrument The instrument, such as shares and commodities on which a futures or options contract is based. Underlying security For options, the security that is subject to purchase or sold upon exercise of an option contract. Undermargined account A margin account that no longer meets minimum maintenance requirements, requiring a margin call on the investor. Underpayment penalty A tax penalty enacted on an individual for not paying enough of his or her total estimated tax and withholding. Underperform An analyst recommendation that means a stock is expected to do slightly worse than the market return. Underpricing Issuing securities at less than their market value. Undersell or undercut To sell goods more cheaply than competitors. Undervalued A company whose stock market value is less than that of its assets. Undervalued security A security selling below its market value or liquidation value. Underweight An situation where a portfolio does not hold a sufficient amount of securities to satisfy the accepted benchmark of the portfolio's asset allocation strategy. Underwithholding When a taxpayer has withheld too little tax from salary and will therefore owe tax when filing a return. Underwriter 1) A company that brings a new issue to the market will have to fix the offer price in advance. 2) An agent for a syndicate at Lloyd's who literally writes his name at the foot of a policy to signify acceptance of all or an indicated part of that risk. Underwriting A bank or other financial institution's guarantee to a company that it will buy a certain number of shares in a company's new issue or rights issue, should the issue not be fully subscribed by other investors. Underwriting agreement The contract between a corporation issuing new publicly offered securities and the managing underwriter as agent for the underwriting group. Underwriting Commission The fee investment bankers charge for underwriting a security issue. Underwriting fee The portion of the gross underwriting spread that compensates the securities firms that underwrite a public offering for their services. Underwriting income For an insurance company, the difference between the premiums earned and the costs of settling claims. Underwriting spread The spread between the amount underwriters pay an issuing company for its securities and the amount the underwriters receive from selling the securities in the public offering. Underwriting syndicate A group of investment banks that work together to sell new security offerings to investors. Underwritten offering A purchase and sale. PREVIOUS AND NEXT TERMS-------------------------------------- Undersell or undercut To sell goods more cheaply than competitors. Undervalued A company whose stock market value is less than that of its assets. Undervalued security A security selling below its market value or liquidation value. Underweight An situation where a portfolio does not hold a sufficient amount of securities to satisfy the accepted benchmark of the portfolio's asset allocation strategy. Underwithholding When a taxpayer has withheld too little tax from salary and will therefore owe tax when filing a return. Underwrite Underwriter 1) A company that brings a new issue to the market will have to fix the offer price in advance. 2) An agent for a syndicate at Lloyd's who literally writes his name at the foot of a policy to signify acceptance of all or an indicated part of that risk. Underwriting A bank or other financial institution's guarantee to a company that it will buy a certain number of shares in a company's new issue or rights issue, should the issue not be fully subscribed by other investors. Underwriting agreement The contract between a corporation issuing new publicly offered securities and the managing underwriter as agent for the underwriting group. Underwriting Commission The fee investment bankers charge for underwriting a security issue. Underwriting fee The portion of the gross underwriting spread that compensates the securities firms that underwrite a public offering for their services. We thank you for using the Financial Dictionary to search for Underwrite. If you have a better definition for Underwrite than the one presented here, please let us know by making use of the suggest a term option. This definition of Underwrite may be disputed by other professionals. Our attempt is to provide easy definitions on Underwrite and any other medical topic for the public at large.
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