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Dutch auction |
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Dutch auctionAuction in which the lowest price necessary to sell the entire offering becomes the price at which all securities offered are sold. This technique has been used in Treasury auctions. Often used in risk arbitrage. Auction system in which the price of an item (stock) is gradually lowered until it meets a responsive bid (government T-bills) or offer (corporate repurchase) and is sold. In a corporate repurchase, a range of prices is set by the company within which shareholders are invited to tender their shares. The tender offer is open for a specific period of time (i.e., 20 days), and the quantity of stock to be purchased is stated as well, subject to proration if more shares are tendered than can be legally purchased under the stated terms (often an additional amount equal to 20% of outstanding shares can be purchased). The price paid is that at which the amount stated to be purchased can be sold. Compare to double auction system.Dutch auctionAn auction of multiple identical items in which the winning bidder pays the price bid by the lowest successful bidder. For a contrasting system, see 'Yankee auction'.Similar MatchesPeriodic call auctionPeriodic call auctionSelling stocks by bid at intervals throughout the day. Auction Market Preferred Stock (AMPS)Auction Market Preferred Stock (AMPS)A type of Dutch Auction Preferred Stock (A Merrill Lynch product). Walrasian auctioneerWalrasian auctioneerA hypothetical entity that facilitates market adjustment in disequilibrium by announcing prices and collecting information about supply and demand at those prices without any disequilibrium transactions actually taking place. Yankee auctionYankee auctionAn auction of multiple identical items in which the winning bidders pay the prices that they have bid. For a contrasting system, see 'Dutch auction'. Double auction marketDouble auction marketSystems by which listed securities are bought and sold through brokers on the securities exchanges, as distinguished from the OTC market, where trades are negotiated. Unlike the conventional auction with one auctioneer and many buyers, double auction markets consist of many sellers and many buyers. Further SuggestionsAuction marketsAuction rate preferred stock (ARPS) Double auction system Dutch Auction Preferred Stock |
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