Hot Issue

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DEFINITION

An issue that sells at a premium over the public offering price on the first day of trading. A hot issue is most often association with an initial public offering (IPO), in which the stock of the newly offered company is in great demand, causing the initial trading price to surge above the IPO price.


Also referred to as a hot IPO.



INVESTOPEDIA EXPLAINS

Over the course of history, many newly issued stocks have become hot issues, only to drop down shortly after, often falling far below their IPO price. For example, during the late 1990s, many Internet stocks shot up dramatically in price upon their initial offering, only to crash and burn months later during the tech crash of 2000.


Hot issues can also refer to other types of asset classes as well, such as fixed income and ETF issues.




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Hot Definitions
  1. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
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  4. Maintenance Margin

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    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
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