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Underwriting fee
Underwriting feeThe portion of the gross underwriting spread that compensates the securities firms that underwrite a public offering for their services. RELATED TERMS-------------------------------------- Gross A sum without deduction or set off, i.e., without deduction of taxes from a person's income. 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. Spread 1) The gap between bid and ask prices of a stock or other security. 2) The simultaneous purchase and sale of separate futures or options contracts for the same commodity for delivery in different months. 3) Difference between the price at which an underwriter buys an issue from a firm and the price at which the underwriter sells it to the public. 4) The price an issuer pays above a benchmark fixed-income yield to borrow money. Securities Saleable papers, traded on stock exchanges, that yield an income (dividend, interest, etc.). Underwrite To 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. Public Assets that can be traded in a public market, such as the stock market. Services Activities offered for sale to customers, (advice, transport, banking, insurance, restaurants, hotel rooms, etc.) 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. Underwrite To 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. 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 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-------------------------------------- Underwrite To 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. 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 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. Undigested securities Newly issued securities that are not purchased because of lack of demand during the initial public offering. We thank you for using the Financial Dictionary to search for Underwriting fee. If you have a better definition for Underwriting fee than the one presented here, please let us know by making use of the suggest a term option. This definition of Underwriting fee may be disputed by other professionals. Our attempt is to provide easy definitions on Underwriting fee and any other medical topic for the public at large.
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