Stabilizing Bid

Filed Under:
Dictionary Says

Definition of 'Stabilizing Bid'


A practice used by underwriters to stabilize the secondary market price of a security after an initial public offering (IPO). The bid is made on behalf of the IPO's underwriters to repurchase shares at the offer price.

Investopedia Says

Investopedia explains 'Stabilizing Bid'


Stabilizing bids are one of many methods used by underwriters to support the price of the IPO. Stabilizing bids may be used to support a stock that has high selling pressure from investors looking to "flip" their purchased shares for a quick profit. Any attempt to use a stabilizing bid by an underwriter must be made known to the regulatory body of the market.

comments powered by Disqus
Hot Definitions
  1. Legal Monopoly

    A company that is operating as a monopoly under a government mandate. A legal monopoly offers a specific product or service at a regulated price and can either be independently run and government regulated, or government run and regulated.
  2. Closed-End Fund

    A closed-end fund is a publicly traded investment company that raises a fixed amount of capital through an initial public offering (IPO). The fund is then structured, listed and traded like a stock on a stock exchange.
  3. Payday Loan

    A type of short-term borrowing where an individual borrows a small amount at a very high rate of interest. The borrower typically writes a post-dated personal check in the amount they wish to borrow plus a fee in exchange for cash.
  4. Securitization

    The process through which an issuer creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors.
  5. Economic Forecasting

    The process of attempting to predict the future condition of the economy. This involves the use of statistical models utilizing variables sometimes called indicators.
  6. Chicago Mercantile Exchange - CME

    The world's second-largest exchange for futures and options on futures and the largest in the U.S. Trading involves mostly futures on interest rates, currency, equities, stock indices and agricultural products.
Trading Center