Listen to a Business English Dialogue About When issued
Harper: Hi Joshua, have you heard about “when issued” trading in finance? I’ve come across the term, but I’m not entirely sure what it means.
Joshua: Hey Harper, yes, “when issued” trading occurs when securities are traded before they are officially issued and available for delivery. It allows investors to buy or sell securities based on an agreement to exchange them on the settlement date.
Harper: Oh, I see. How does “when issued” trading benefit investors?
Joshua: “When issued” trading benefits investors by providing an opportunity to secure a desired investment before it becomes widely available in the market. It can also help investors gauge market demand and price expectations for new securities.
Harper: That sounds interesting. Are there any risks associated with “when issued” trading?
Joshua: Yes, there are risks, such as uncertainty about the final terms of the securities, including their pricing and features, which may impact their value upon issuance. Additionally, “when issued” trading may be subject to market volatility and liquidity constraints.
Harper: Got it. How do investors participate in “when issued” trading?
Joshua: Investors can participate in “when issued” trading through brokerage accounts or trading platforms that offer access to pre-issued securities markets. They can place buy or sell orders for the desired securities based on their investment objectives and market analysis.
Harper: Thanks for explaining, Joshua. It’s helpful to understand how “when issued” trading works and its potential implications for investors.
Joshua: You’re welcome, Harper. “When issued” trading can provide opportunities for investors, but it’s essential to carefully consider the associated risks and conduct thorough due diligence before participating. If you have any more questions, feel free to ask!