Pre-Syndicate Bid

DEFINITION of 'Pre-Syndicate Bid'

A bid entered by a syndicate manager or underwriter in the Nasdaq system to stabilize the price of a Nasdaq security prior to the effective date of a registered secondary offering. The term "penalty bid" is also used.

BREAKING DOWN 'Pre-Syndicate Bid'

This is permissible under SEC Rule 10b-7; otherwise the practice is prohibited. Because the bid serves to stabilize the price of the stock, it helps facilitate distribution of the offering. This process is sometimes also referred to as "pegging".

RELATED TERMS
  1. Syndicate Bid

    A bid that can be entered in the Nasdaq system to stabilize the ...
  2. Penalty Bid

    A bid, or offer to purchase securities, provided by a lead underwriter ...
  3. Competitive Bid

    A step in the initial public offering process whereby an underwriter ...
  4. Bid Price

    The price a buyer is willing to pay for a security. This is one ...
  5. Best Bid

    The highest quoted bid for a particular trading instrument among ...
  6. Bid Tick

    An indication of whether the latest bid price is higher, lower ...
Related Articles
  1. Term

    Negotiating the Bid

    A bid is an offer investors make to buy a security.
  2. Term

    How Bid Price Affects Liquidity

    The bid price is the amount a buyer will pay for a security.
  3. Economics

    What is a Syndicate?

    A syndicate is a group of professionals that temporarily form into one entity to handle a large transaction that’s too big for each to handle alone.
  4. Investing

    What's a T Bond?

    Treasury bonds, or T-bonds, are marketable securities issued by the US government, and are available in increments of $100. Bonds have a maturity range of ten to 30 years, with 30 being the most ...
  5. Investing Basics

    Understanding NASDAQ

    NASDAQ is an acronym that stands for the National Association of Securities Dealers Automated Quotation system.
  6. Active Trading Fundamentals

    What Does Bid And Asked Mean?

    Bid and asked is a two-way price quotation.
  7. Investing

    How Nasdaq Makes Money

    NASDAQ provides a marketplace which offers money-making opportunities to investors. Investopedia explains how NASDAQ makes money.
  8. Home & Auto

    How To Create A Real Estate Bidding War

    There are still many areas in the United States that are attractive enough to buyers that you can start a good, old-fashioned bidding war on your property.
  9. Bonds & Fixed Income

    How To Read A T-Bill Quote

    If you want buy and sell US Treasury bills, you need to learn to read the quotes.
  10. Investing Basics

    This Week In Finance - Nasdaq Turns 40

    As the exchange enters its 40th year, it's a good time to examine how the Nasdaq's become one of the world's largest stock exchanges.
RELATED FAQS
  1. What do the bid and ask prices represent on a stock quote?

    Learn what the bid and ask prices mean in a stock quote. Find out what represents supply and demand in the stock market and ... Read Answer >>
  2. How does an underwriter syndicate work together on an initial public offering (IPO)?

    Learn how underwriting syndicates work together when helping a company undertake an initial public offering, and learn about ... Read Answer >>
  3. What do the numbers that follow the bid and ask numbers in stock quotes represent? ...

    When looking at stock quotes, there are numbers following the bid and ask prices for a particular stock. These numbers usually ... Read Answer >>
  4. Under what circumstances might a syndicated loan be arranged?

    Learn about the types of syndicated loans, why some lenders choose to establish or join a syndicate, and why some borrowers ... Read Answer >>
  5. Why are the bid prices of T-bills higher than the ask prices? Aren't bids supposed ...

    Yes, you are correct that the ask price of a security should typically be higher than the bid price. This is because people ... Read Answer >>
  6. An underwriting syndicate for a new municipal offering of $10,000,000 has been formed ...

    The correct answer is b. A divided or “Western” syndicate is one in which the members stand alone. When a member of such ... Read Answer >>
Hot Definitions
  1. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  2. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  3. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  4. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  5. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  6. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
Trading Center