Glossary of Municipal Securities Terms

STABILIZATION

A practice, generally used in the equity market in connection with certain public offerings in which an underwriter posts an open bid for securities at a stated price, or purchases such securities in the secondary market if the offering price declines below a certain level. Stabilization is intended to maintain an orderly market for the securities during the underwriting and to prevent sharp fluctuations in the market for the securities due simply to supply factors.

    

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