It's basically another term for a limit order when buying or selling securities. Example: You want to sell 1,000 shares of Colonel Electric (The General got demoted after it cut its dividends).
The shares have been trading wildly between $15 and $25 a share. You don’t want to feel like a moron for having sold them at $15, when six weeks later they kiss $25. With tongue.
So what do you do? You put in a LIMIT ORDER.
That is, you put a limit of a minimum price of $25/share (AT THAT LIMIT) for Colonel Electric, such that those shares will simply sit in your account, maybe forever…until somebody out in the wild blue yonder of Stockland is willing to pay AT LIMIT $25 or more for the shares where you have put a minimum price limit of $25/share in your order.
So here’s to hoping they sell, and don’t get further demoted. Sergeant Electric is just a place you don’t want to go.
Related or Semi-related Video
Finance: What is Oversubscribed?3 Views
finance a la shmoop what is oversubscribed ask your grandparents
about the magazine industry it produced a product that looked like this and [Pile of magazines appear]
buyers subscribed to it weekly monthly something like that every now and then
an issue would come out that was so popular so catchy so got a must have it [Playbond magazine appears]
right now that it was quote oversubscribed unquote and the printing
presses had to run another 24 hours straight to make up for the huge demand
well in the land of finance that term oversubscribed is usually ascribed to a
hot IPO when you subscribe in a securities offering you're essentially
signing up to buy a given volume of that security at a given price within a
certain time window that is a given company whatever dot-com offers five
million shares to the public at ten bucks a share
but the Roadshow was such a hit that the bankers could raise prices to twelve
bucks a share and then exercise their greenshoe option and sell a whole trunk [Greenshoe option definition appears]
full of additional shares to the public making Commission's on all of them more
shares higher prices and it sounds like a twisted Walmart slogan well the shares [Wal-Mart store appears]
being over subscribed were all a result of the extremely hot and high demand for
shares by the investing public so yeah that's over subscribed on Wall
Street problem we here at shmoop would love to have go ahead and click and buy [Shmoop video appears on webpage]
we got to keep the rent behavior somewhere
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