Definition§
When Issued (WI) refers to a conditional transaction in which a security has been authorized but has not yet been formally issued. This status allows for the trading of Treasury securities, stock splits, and new issues of stocks and bonds on a speculative basis prior to their actual issuance.
When Issued vs. Regular Trading§
| When Issued (WI) | Regular Trading |
|---|---|
| Conditional orders are placed based on expected issuance. | Actual securities are already issued and available for trading. |
| Trades may not be completed if issuance is canceled. | Trades are completed based on the current market price. |
| Provides insight into market interest and valuation prior to issuance. | Reflects current market conditions and pricing of available securities. |
Related Terms§
- Underwriter: A financial institution that arranges the issuance and distribution of new securities.
- New Issue: A type of security that is being sold for the first time.
- Subscription: An agreement to purchase a security before it is formally issued.
Examples§
- When Issued Treasury Securities: Investors can trade Treasury securities on a WI basis once the U.S. Treasury announces the offering period, even before the actual securities are issued.
- New Stock Offerings: A company planning to issue new stock may allow investors to place WI orders that will convert to formal trades once the stock is issued.
Humorous Insight§
“Buying on a when-issued basis is a bit like ordering a pizza without the toppings: you know it’s coming, but there’s always that chance it might not be as delicious as you hoped!” 🍕😄
Fun Fact§
Did you know? The concept of “when issued” trading dates back to the mid-20th century but has become increasingly significant with the growth of the financial markets—think of it as a sneak peek before the grand opening! 🎉📈
Frequently Asked Questions§
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What happens if a WI transaction is canceled? If a security is not issued, all orders placed on a when-issued basis are canceled, and no trades take place.
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How is market interest gauged before issuance? When issued transactions can indicate the level of interest investors have in a new issue based on the volume and price of WI trades.
Resources for Further Study§
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Books
- “The Intelligent Investor” by Benjamin Graham - An essential read for understanding investment principles, including new issues and market trading.
- “A Random Walk Down Wall Street” by Burton Malkiel - A comprehensive guide to understanding market movements, including WI dynamics.
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Online Resources
- Investopedia’s Guide to When Issued: A thorough explanation of when-issued trading.
- SEC.gov on New Issues: Updates and regulations by the U.S. Securities and Exchange Commission.
Test Your Knowledge: When Issued Transactions Quiz§
Thanks for diving into the whimsical world of finance! Always remember, just like stocks, laughter is best when shared! Keep learning and laughing! 😄📈
