What Is a Primary Market? A primary market is a source of new securities. Often on an exchange, it’s where companies, governments, and other groups go to obtain financing through debt-based or equity-based securities. Primary markets are facilitated by underwriting groups consisting of investment banks that set a beginning price range for a given security
What Is a Primary Offering? A primary offering is the first issuance of stock from a private company for public sale. The first public sale of stock is called an initial public offering (IPO). It is a means for a private company to raise equity capital through financial markets to expand its business operations. A primary offering can
What Is Primary Recovery? Primary recovery, also known as “primary production,” is the initial stage in the extraction process for oil and gas. In crude oil production, various methods of primary recovery can be used. Typically, the primary recovery process involves placing increased pressure on the oil within wells in order to force oil to
What Is a Primary Regulator? A primary regulator is a state or federal regulatory agency tasked with being the main supervising entity of a financial institution. In most cases, this is the same agency that issued the initial charter allowing the financial institution to operate. Banks and other financial institutions must file quarterly call reports
What Are Primary Reserves? Primary reserves are the minimum amount of cash legally required to operate a bank. Primary reserves also include the legal reserves housed in a Federal Reserve bank or other correspondent bank. Checks that have not been collected are included in this amount as well. The legal primary reserve requirement may or
What Is Prime? Prime is a classification of borrowers, rates, or holdings in the lending market that are considered to be of high quality. This classification often refers to loans made to high-quality prime borrowers that are offered prime or relatively low interest rates. Key Takeaways Prime is a term that refers to high quality in
What Is a Prime Borrower? A prime borrower is someone who is considered a below-average credit risk. This type of borrower is considered likely to make loan payments on time and likely to repay the loan in full. Understanding Prime Borrower Prime borrowers have credit files that show a strong history of using credit wisely
What Is a Prime Brokerage? A prime brokerage is a bundled group of services that investment banks and other financial institutions offer to hedge funds and other large investment clients that need to be able to borrow securities or cash in order to engage in netting to achieve absolute returns. The services provided under prime
What Is a Price Band? A price band is a value-setting method in which a seller indicates an upper and lower cost limit, between which buyers are able to place bids. The price band’s floor and cap provide guidance to the buyers. This type of auction pricing technique is often used with initial public offerings (IPOs).
What Is a Price by Volume Chart (PBV)? A price by volume (PBV) chart is a horizontal histogram plotted on a security’s chart, showing the volume of shares traded at a specific price level. Often times, price by volume histograms are found on the Y-axis and are used by technical traders to predict areas of support
