"When issued" (WI) is a term used in securities trading to refer to a transaction that is completed on a provisional basis in anticipation of a security being officially issued or listed on a stock exchange. WI transactions allow investors to trade a security before it is officially issued, giving them the opportunity to lock in a price before the security becomes widely available.When a new security is about to be issued, it is common for investment banks and underwriters to provide an estimate of the security's price and offer it to prospective buyers. In some cases, the actual pricing and terms of the security may not be finalized until just before the issue date, but WI transactions allow investors to trade the security based on the estimated price and terms.WI transactions are settled on a "when-issued" basis, meaning that the trade is completed when the security is officially issued and listed on a stock exchange. In the meantime, the security is traded based on the estimated price and terms, and the actual price and terms may differ slightly from the WI transaction price.For example, suppose a new company is issuing shares of stock and the investment bank estimates that the stock will be priced at $100 per share. An investor may want to buy 100 shares of the stock, but the official listing and pricing of the stock won't occur for another two weeks. The investor could enter into a WI transaction with the investment bank, buying the shares for $100 each, and the trade would be settled when the stock is officially listed and priced. If the actual price of the stock is different from the estimated price, the WI transaction price may be adjusted accordingly.In conclusion, "when issued" transactions allow investors to trade a security before it is officially issued, giving them the opportunity to lock in a price before the security becomes widely available. WI transactions are settled on a "when-issued" basis, meaning that the trade is completed when the security is officially issued and listed on a stock exchange. They are used to provide a provisional market for new securities, allowing investors to trade the security based on estimated pricing and terms before the actual pricing and terms are determined.
