Dutch auction


Dutch auction
Auction in which the lowest price necessary to sell the entire offering becomes the price at which all securities offered are sold. This technique has been used in Treasury auctions. The New York Times Financial Glossary
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auction in which the lowest price necessary to sell the entire offering becomes the price at which all securities offered are sold. This technique has been used in Treasury auctions. Often used in risk arbitrage. auction system in which the price of an item ( stock) is gradually lowered until it meets a responsive bid ( government T-bills) or offer ( corporate repurchase) and is sold. In a corporate repurchase, a range of prices is set by the company within which shareholders are invited to tender their shares. The tender offer is open for a specific period of time ( i.e., 20 days), and the quantity of stock to be purchased is stated as well, subject to proration if more shares are tendered than can be legally purchased under the stated terms (often an additional amount equal to 20% of outstanding shares can be purchased). The price paid is that at which the amount stated to be purchased can be sold. Compare to double auction system. Bloomberg Financial Dictionary
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An action by a party wishing to acquire a security. Holders of the security are invited to make an offer to sell, within a specific price range. The acquiring party will buy from the holder with lowest offer. Euroclear Clearing and Settlement glossary

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Dutch auction Dutch auction auction1

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   An auction where the price is lowered gradually - from a price well above the true value - until a responsive bid is seen. This then becomes the price at which the offering is sold. The US Treasury sells its Treasury bills using a similar basis where the bids are termed tenders.
   ► See also Treasury Bill.

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Dutch auction UK US noun [C]
COMMERCE an auction (= public sale) at which the price being asked for something is slowly reduced until someone will buy it: »

Some traders, especially those selling fruit, would stand on their stalls and sell their goods by Dutch auction.

FINANCE a situation in which two or more groups compete to see who can reduce an amount the most: »

The tendering process must not be a ""Dutch auction"": unfairly trading one tenderer off against another by using the lowest tender to seek a reduction in time or costs from the others.

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The Government and opposition are engaged in a Dutch auction over who would cut the most civil service jobs.

FINANCE in the US, a system used by a company that wants to buy back its shares. The company sets the minimum and maximum prices it is willing to buy at, the shareholders state which price they would be willing to sell at, and the company then chooses which shareholders to buy from: »

Hambrecht conducts so-called Dutch auctions, in which the price is set at the highest possible level that allows all shares to be sold.

COMMERCE a UNIFORM PRICE AUCTION(Cf. ↑uniform price auction)

Financial and business terms. 2012.

Look at other dictionaries:

  • Dutch auction — 1957 in Germany to sell fruits A Dutch auction is a type of auction where the auctioneer begins with a high asking price which is lowered until some participant is willing to accept the auctioneer s price, or a predetermined reserve price (the… …   Wikipedia

  • Dutch auction — Dutch Dutch, a. [D. duitsch German; or G. deutsch, orig., popular, national, OD. dietsc, MHG. diutsch, tiutsch, OHG. diutisk, fr. diot, diota, a people, a nation; akin to AS. pe[ o]d, OS. thiod, thioda, Goth. piuda; cf. Lith. tauta land, OIr.… …   The Collaborative International Dictionary of English

  • Dutch auction — USA Dutch auction, Also known as descending price auction. A type of offering which uses a bidding process to find an optimal market price for a security, the lowest price at which an issuing company can sell all the available securities. In a… …   Law dictionary

  • Dutch auction — Auction Auc tion, n. [L. auctio an increasing, a public sale, where the price was called out, and the article to be sold was adjudged to the last increaser of the price, or the highest bidder, fr. L. augere, auctum, to increase. See {Augment}.] 1 …   The Collaborative International Dictionary of English

  • dutch auction — If something is sold by setting a price, then reducing it until someone buys it, it is sold in a Dutch auction. It can also mean that something is changed until it is accepted by everyone …   The small dictionary of idiomes

  • Dutch auction — n. an auction in which an initially high offering price is lowered by increments until a buyer or, as in U.S. Treasury sales of securities, sufficient buyers are found …   English World dictionary

  • Dutch auction — n [U and C] a public sale at which the price of something is gradually reduced until someone will pay it …   Dictionary of contemporary English

  • Dutch auction — noun count a sale in which the price of something gradually goes down until someone agrees to buy it …   Usage of the words and phrases in modern English

  • Dutch auction — ► NOUN ▪ a method of selling in which the price is reduced until a buyer is found …   English terms dictionary

  • Dutch Auction — 1. A public offering auction structure in which the price of the offering is set after taking in all bids and determining the highest price at which the total offering can be sold. In this type of auction, investors place a bid for the amount… …   Investment dictionary