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.