Freed Up

AAA

DEFINITION of 'Freed Up'

1. A slang phrase used in the underwriting process to refer to the time when the underwriters are no longer obligated to sell securities at the agreed upon price, as decided by the syndicate. When an underwriter is freed up, it is allowed to trade any remaining securities at the market price.

2. The amount of capital that becomes available to an investor when a position is closed. The "freed up" capital can then be used to invest in other assets.

INVESTOPEDIA EXPLAINS 'Freed Up'

1. During an initial public offering, underwriters agree to market their allotted securities at a fixed price. Sometimes, the demand for the shares is very large and investors are willing to pay higher prices. Until the syndicate is "freed up" from the fixed price restrictions, it cannot adjust the sale price of the stock, despite increased demand.

2. For example, an investor that holds shares of ABC Company may decide to close the position and use the freed up capital to invest in other opportunities.

RELATED TERMS
  1. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  2. Jointly and Severally

    1. A legal term describing a partnership in which individual ...
  3. Underwriting

    1. The process by which investment bankers raise investment capital ...
  4. Penalty Bid

    A bid, or offer to purchase securities, provided by a lead underwriter ...
  5. Syndicate

    A professional financial services group formed temporarily for ...
  6. After-Market Performance

    The price level performance of a newly issued stock after its ...
Related Articles
  1. Brokers

    Brokerage Functions: Underwriting And Agency Roles

    Learning about these various activities can give insight into how securities are issued and traded.
  2. Investing Basics

    A Look At Primary And Secondary Markets

    Knowing how the primary and secondary markets work is key to understanding how stocks trade.
  3. Fundamental Analysis

    Interpreting A Company's IPO Prospectus Report

    Learn to decipher the secret language of the IPO prospectus report - it can tell you a lot about a company's future.
  4. Investing

    5 Tips For Investing In IPOs

    Thinking of investing in IPOs? Here are five things to remember before jumping into these murky waters.
  5. Retirement

    IPO Basics Tutorial

    What's an IPO, and how did everybody get so rich off them during the dotcom boom? We give you the scoop.
  6. Investing Basics

    How Does Alibaba Make Money? A Simple Guide

    Alibaba broke IPO headlines--but making news and making money are two different things.
  7. In 2014, stock markets traded at record levels and the US IPO market enjoyed activity not seen since the 2000 tech bubble. Here is a snapshot of some of the year’s most successful IPOs.
    Investing News

    5 IPOs That Broke The Markets In 2014

    In 2014, stock markets traded at record levels and the US IPO market enjoyed activity not seen since the 2000 tech bubble. Here is a snapshot of some of the year’s most successful IPOs.
  8. Investing Basics

    Alibaba IPO: Why List In the U.S.?

    For companies like Alibaba, a U.S. listing can provide some benefits that they can't find at the exchanges nearer to home.
  9. Despite a booming market, some IPOs crashed and burned. Sure, going public brings a flood of capital, but it can also expose a company to unpredictable market forces.
    Investing News

    IPO Stinkers: The Biggest IPO FAILS of 2014

    Despite a booming market, some IPOs crashed and burned. Sure, going public brings a flood of capital, but it can also expose a company to unpredictable market forces.
  10. Investing Basics

    The 10 Biggest Latin American Banks

    Brazil is home to most of the major banks in Latin America, claiming six of the ten largest financial institutions in the region.

You May Also Like

Hot Definitions
  1. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  2. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  3. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  4. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  5. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  6. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
Trading Center