An Indication of Interest or IOI, is an underwriting expression showing a conditional, non-binding interest in buying a security that is currently in registration—awaiting approval by the Securities and Exchange Commission (SEC). Though not a guarantee, an IOI signals to potential sellers that there is demand for the security and may help to facilitate its sale.IOIs can be useful for both buyers and sellers. For buyers, they provide information about potential demand for the security; for sellers, they represent an opportunity to lock in interested parties early on and potentially sell at a premium. Because of this potential benefit to both sides, it's important to understand what goes into an IOI before signing one.The most important thing to remember about IOIs is that they are non-binding. This means that either party can back out of the deal without penalty if they so choose. As such, it's important not to get too attached to any particular security until after the deal has been finalized.
