Master the Spread in New Issues Underwriting for the SIE Exam — Part 1

In this SIE Exam Prep video, we focus on the underwriting spread for new issues, a key concept in the Primary Market section. Understanding the underwriting spread is essential for breaking down how underwriters make a profit and how securities are priced when they first hit the market.

This video covers:

The components of the underwriting spread, including the management fee, syndicate fee, and selling concession.

How the underwriter’s profit is determined based on the spread.

The role of the syndicate in distributing the securities and how the underwriting spread affects the final offering price.

The difference between the public offering price (POP) and the underwriting price.

In Part 1 of this series, we’ll cover the basics of the spread and lay the foundation for more advanced concepts in the next video.

Description:

Prepare for the SIE Exam by mastering the underwriting spread for new issues. In Part 1 of this series, we break down the components of the spread and explain how underwriters and syndicates make money when securities are first issued.

In this video, you’ll learn:

The breakdown of the underwriting spread: management fee, syndicate fee, and selling concession.

How the spread determines the underwriter’s profit.

The difference between the underwriting price and public offering price (POP).

The role of the syndicate in distributing securities.

Part 1 provides the foundation for understanding the underwriting spread in new issues, a key concept for your SIE Exam. Stay tuned for Part 2, where we dive deeper into advanced concepts of underwriting spreads.

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