Pot

DEFINITION of 'Pot'

The portion of a stock or bond issue that investment bankers return to the underwriter so the portion can be sold to institutional investors.

BREAKING DOWN 'Pot'

Depending upon the issue and the size of the pot, it may be very lucrative for the underwriter to sell inventory to institutional investors.

RELATED TERMS
  1. Underwriting Agreement

    A contract between a group of investment bankers who form an ...
  2. Pot Is Clean

    A slang phrase referring to a situation in which an underwriter ...
  3. Underwriting Fees

    Underwriting fees are monies collected by underwriters for performing ...
  4. Underwriting Risk

    The risk of loss borne by an underwriter. Underwriting risk generally ...
  5. Underwriter

    An underwriter is a company or other entity that administers ...
  6. Undivided Account

    An underwriting system in which each underwriter in the group ...
Related Articles
  1. Personal Finance

    What is Underwriting?

    Underwriting is a term most often used in investment banking, insurance and commercial banking. Generally, underwriting means receiving a remuneration for the willingness to pay for or incur ...
  2. Professionals

    What Do Investment Bankers Really Do?

    Investment bankers are essentially corporate financial advisors and can help companies manage the process of raising financing for their activities.
  3. Personal Finance

    Is Insurance Underwriting Right For You?

    If you have excellent analytical skills and an eye for detail, this may be your calling.
  4. Markets

    Basics Of Federal Bond Issues

    Treasuries are considered the safest investments, but they should still be analyzed when issued.
  5. Investing

    What Does an Investment Banker Do?

    An investment banker works for a financial institution that helps companies, governments and agencies raise money by issuing securities.
  6. Managing Wealth

    Investment Banker: Job Description & Average Salary

    Identify what investment bankers do in a typical work day, learn what skills are needed to be successful and understand how investment bankers get paid.
  7. Markets

    Pot Stocks: How the Election Will Shape This Industry

    With pot legislation on the ballot in states around the country this election, the industry could be poised for a boom.
  8. Investing

    Brokerage Functions: Underwriting And Agency Roles

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

    Investment Banker: Career Path & Qualifications

    Learn more about the work of investment bankers, and discover how most professionals got started in the field and progressed into their roles.
  10. Investing

    What is a Greenshoe Option?

    A greenshoe option is a provision in an underwriting agreement that allows the underwriter to buy up to 15% of the shares in an IPO at the offer price.
RELATED FAQS
  1. Do underwriters make guarantees to sell an entire IPO issue?

    Underwriters represent the group of representatives from an investment bank whose main responsibility is to complete the ... Read Answer >>
  2. How does insurance underwriting differ from investment underwriting?

    Understand the difference between insurance underwriting and investment underwriting, including what types of risks an underwriter ... Read Answer >>
  3. What are examples of risks for all underwriter types?

    Learn about the risks faced by different types of underwriting activity. Explore specific examples of risks faced by insurance ... Read Answer >>
  4. What does the underwriter do in a new stock offering?

    Learn the role an underwriter plays for an initial public offering, and the steps an underwriter takes in preparing for an ... Read Answer >>
  5. How do I become an underwriter?

    Learn about the education, training and certification required to become an insurance underwriter as well as the important ... Read Answer >>
  6. What is real estate underwriting?

    See how underwriters for major lenders scrutinize real estate loans and manage their risk, and learn the origin of the term ... Read Answer >>
Hot Definitions
  1. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  2. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  3. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  4. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  5. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  6. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
Trading Center