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Finance GlossaryHard Underwriting
Hard Underwriting
Definition of Hard Underwriting
A hard underwriting occurs when the underwriter agrees to buy their share of stock before the IPO opens. This is known as hard underwriting because in a regular underwriting process, the underwriter is liable to buy all unsold shares after the issue opens.
Related Terms
Unrealized Gain
An unrealized gain refers to the increase in value of an investment that has not yet been sold. For instance, if an investor buys shares at ₹500 and their current market price rises to ₹650, the ₹150 increase is an unrealized gain until the shares are actually sold.
Basing
Basing happens when a security trades sideways after prolonged periods of falling prices.
As a result, the security forms a “base” or flat pattern which means there is little to no upward or downward movement and a decline in volatility.
This may go on for a relatively long time but is crucial as basing is an indicator of any meaningful reversal that may happen.
As a result, the security forms a “base” or flat pattern which means there is little to no upward or downward movement and a decline in volatility.
This may go on for a relatively long time but is crucial as basing is an indicator of any meaningful reversal that may happen.
Discount Brokers
Discount brokers are platforms that offer essential stock trading and investment services rather than a full stack of services that may or may not be useful for everyone.
Discount brokers are discount brokers because their service is priced competitively, meaning the cost of trading and investing may be significantly low than a fullservice broker.
Discount brokers are discount brokers because their service is priced competitively, meaning the cost of trading and investing may be significantly low than a fullservice broker.
BSE
Bombay Stock Exchange or BSE is a stock exchange that allows companies to issue new securities through IPOs or FPOs and enables traders & investors to buy and sell securities like shares and ETFs. Established in 1875 under a banyan tree in Mumbai, BSE is the oldest stock exchange in India and Asia.
Acid Test Ratio
An Acid Test Ratio shows whether a company has enough liquid short-term assets to deal with current liabilities.
The higher the Acid Test Ratio the better a company’s ability to deal with debt.
Acid Test Ratio = (Cash + Marketable Securities + Accounts Receivable)/Current liabilities
The higher the Acid Test Ratio the better a company’s ability to deal with debt.
Acid Test Ratio = (Cash + Marketable Securities + Accounts Receivable)/Current liabilities
Volume
Volume represents the total number of shares or contracts traded in a security during a specific period. High trading volume often confirms the strength of a price movement, such as a stock breaking out of resistance with heavy volume, while low volume may indicate weak investor interest.
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