Underwriting Spread

What is the 'Underwriting Spread'

The underwriting spread is the spread between the amount underwriters pay an issuing company for its securities and the amount the underwriters receive from selling the securities in the public offering.

BREAKING DOWN 'Underwriting Spread'

The size of the underwriting spread depends on the negotiations and competitive bidding amongst underwriters and the company itself. The spread increases as the risks involved with the issuance increase.

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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 >>
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    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 >>
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