| Investment Dictionary: Laddering |
The promotion of inflated pre-IPO prices for the sake of obtaining a greater allotment of the offering.
Investopedia Says:
An underwriter will push up the issue price of an IPO through promotion in order to please the issuer and secure a larger allotment.
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| Insurance Dictionary: Laddering |
Purchasing bond investments that mature at different time intervals.
| Wikipedia: Laddering |
Laddering is an investment technique that requires investors to purchase multiple financial products with different maturity dates.
Laddering avoids the risk of reinvesting a big portion of assets in an unfavorable financial environment. For example, a person has both a 2015 matured CD and a 2018 matured CD. Even if the interest rate drops fairly low in 2015 when one certificate is to be renewed, half of the income is locked in until 2018.
Laddering can free up capital as needed. A person may purchase a shorter term bond in the event that he needs the capital soon to fund his children's tuition while purchasing other longer term bonds that mature later as retirement spending in a more favorable rate, assuming the economy is experiencing a normal yield curve during this time.
Laddering also describes a process where, in order to purchase shares at a given price, investors must also agree to purchase additional shares at a higher price. This artificially inflates the price of the stock and allows insiders to buy at the lower price, with a guarantee that they will be able to sell at a higher price. This practice is illegal.
This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)
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