Understanding Workable Indication (Securities) in Legal Terms
Definition & Meaning
A workable indication in the municipal bond market refers to a nominal quote that suggests an approximate price for a bond. This quote is typically one-sided, meaning it will either represent a bid price (the price a buyer is willing to pay) or an asked price (the price a seller is asking for). Workable indications serve as a useful reference for investors and traders in assessing market conditions and making informed decisions.
Legal Use & context
The term "workable indication" is primarily used in the context of municipal bonds, which are debt securities issued by local government entities. In legal practice, these indications can play a role in transactions involving securities, particularly in the areas of finance and investment law. Users may encounter this term when dealing with bond trading, investment strategies, or when utilizing legal forms related to securities transactions.
Real-world examples
Here are a couple of examples of abatement:
Example 1: An investor receives a workable indication from a broker stating that the asked price for a municipal bond is $100,000. This means the investor can expect to pay around this amount, but the final price may vary.
Example 2: A trader sees a workable indication of a bid price at $95,000 for a specific bond. This suggests that buyers are willing to pay approximately this amount, guiding the seller in their pricing strategy. (hypothetical example)