A process used to determine the offer price of securities during an IPO by collecting bids from institutional investors at various price levels. It helps gauge market demand and establish an appropriate pricing range.
'Book' from Old English 'boc' (written document) referring to the record of bids, and 'building' indicating the gradual construction of the order book. This method developed in the 1980s as a more efficient alternative to fixed-price offerings.
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