Gray market


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Gray market

Describes the sale of securities that have not officially been issued to firms other than the underwriting syndicate. This type of market serves as a good indicator of demand for a new issue in the public market.

Gray Market

Trade using unofficial and unregulated, but still legal, means. In securities, a gray market typically refers to trade in bonds or stocks not yet issued. These sales are contingent upon the issuance actually taking place, and are sometimes considered benchmarks for how successful the issuance will be. Another example of a gray market is the pharmaceuticals industry, in which buyers in different countries sometimes pay very different amounts. Buyers in the more expensive country may travel to the other country to buy their medicines, creating a gray market.
References in periodicals archive ?
3Com has spent the last few years identifying its gray market exposure and working on ways to reduce it.
There are two main reasons that could be causing the low demand for iPhone X in China's gray market at present.
This contractual, self-regulatory response to gray markets would ensure that ethical drugs in short supply are not price "churned" through the gray market distribution chain, but instead result in higher revenues for the manufacturers while ensuring the integrity and safety of the ethical drug supply chain and avoiding fallout from "price gouging" accusations against the gray markets.
The gray market can stimulate competition and benefit the consumer--the purchaser receives a lower-priced good and this benefits consumer welfare [Nolan-Haley 1983, p.
In some countries, sale of gray market goods is allowed under trademark law but protection under copyright laws may be available, while in other countries both criminal and civil protections are available for the trademark owner to prevent third parties from importing parallel goods,
The gray market controversy first developed in 1923 when the Supreme Court affirmed the prohibition of gray goods in the U.S.
"We've seen various instances where the Apple iPhone or Samsung Galaxy S4 is available cheaper through official channels than through gray market operators with the added advantage those official stocks carry a full manufacturer's warranty.
Copyright was also a questionable legal issue in the gray market economy.
So far gray market operation has remained as illegal but not unsafe, but it may not remain so for ever.
While such inflated prices may sound like gouging, prosecuting "gray market" wholesalers has proved to be a difficult task since many operate in Southern states where laws are lax.
"The swapping is happening in the gray market, but I have too much to lose," adds Knight.
[paragraph] At stake is the future of so-called "gray market" goods.