Price Band

AAA

DEFINITION of 'Price Band'

A value-setting method in which a seller indicates an upper and lower cost range, between which buyers are able to place bids. The price band's floor and cap provides guidance to the buyers. This type of auction pricing technique is often used with initial public offerings (IPOs).

INVESTOPEDIA EXPLAINS 'Price Band'

Price bands can also be used in international trade. A country can set an upper and lower price that it will allow a good to be sold at in the market. If the price of an imported good is below the lower price threshold, the country could tax the good until it falls within the price band.

RELATED TERMS
  1. Sealed-Bid Auction

    A type of auction process in which all bidders simultaneously ...
  2. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  3. Public Offering Price - POP

    The price at which new issues of stock are offered to the public ...
  4. Dutch Auction

    1. A public offering auction structure in which the price of ...
  5. Auction

    A system where potential buyers place competitive bids on assets ...
  6. Welfare Capitalism

    Definition of welfare capitalism.
Related Articles
  1. Fundamental Analysis

    How The Sarbanes-Oxley Era Affected ...

  2. Investing

    5 Tips For Investing In IPOs

  3. Personal Finance

    What Is International Trade?

  4. Economics

    The Basics Of Tariffs And Trade Barriers

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center