Browse by Category   Investing / Investments Real estate investing Stock investing Investment management Retirement investing Bonds / bond funds Mutual Funds   Personal Finance Business and finance Household finance Mortgage Finance dictionary Corporate finance Financial service Money management Estate planning Loans   Stock Market Investing Stock research Stock trading Stock options Stock trading Stock exchanges	InvestHub.com's Finance Dictionary and Glossary of Investment Terms penalty bid   Definition 1. A syndicate manager's or underwriter's offer to buy a security at specific price during a new issue distribution. The bid acts to stabilize the price of the stock, to facilitate distribution. The bid, also called "pegging," is permitted under Securities and Exchange Commission Rule 10b-7; otherwise the practice is prohibited. (See bid, new issue, syndicate manager, underwriter)   Definition 2. A penalty bid is intended to facilitate a securities offering by stabilizing its price during the distribution period. This bid is typically entered by the managing underwriter on behalf of a syndicate.
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