Book Entry Securities
Book entry securities are financial instruments like stocks, bonds, ETFs, and others whose ownership is recorded electronically, eliminating the need for physical certificates. This system modernizes the process of tracking ownership and trading, making it more efficient and secure. Book building is the process of determining the issue price of a financial instrument based on investor demand, usually during an IPO. Instead of setting a fixed price, the process gathers bids from investors to establish an optimal issue price. Historically, physical ownership certificates were issued, and selling shares required presenting the certificate for transfer. However, book entries have replaced physical certificates, with ownership tracked electronically through depositories like NSDL or CDSL. These depositories then provide buyers with statements confirming their ownership.
Related Terms
Equity
Equity refers to ownership in a company, typically in the form of stocks or shares....
Common Stocks
Common stock is a type of share that grants the holder the right to a...
Insider Trading
Insider trading involves buying or selling shares based on non-public, material information, often obtained through...
Blue Chip Stocks
Blue chip stocks are shares of well-established, financially stable, and reputable companies that have been...
Ask Size
The ask size refers to the number of units of a security that an investor...
Commodity
A commodity refers to physical goods and raw materials such as aluminium, cotton, copper, sugar,...
