# When Issued (WI) Transactions: Definition & Example

## What Does "When Issued" Mean?

When issued (WI) means a transaction is made conditionally because a security is authorized but not issued. Treasury securities, [stock splits](https://www.investopedia.com/terms/s/stocksplit.asp), and new stocks and bonds are traded on a when-issued basis.

Before a new issue's offering, [underwriters](https://www.investopedia.com/terms/u/underwriter.asp) approach potential investors to book orders for the new issue. When-issued trades are conditional and the when-issued market can serve as an indicator of investor interest. They come with both benefits and risks, such as liquidity and market demand insights.

### Key Takeaways

*   When issued (WI) transactions are contingent trades made for securities announced but not yet issued, offering investors an early opportunity to express interest.
*   WI trading is commonly used for treasury securities, stock splits, and new issues of stocks and bonds, providing market insight into the demand for such securities.
*   These transactions are conditional and may not be finalized if the security offering is canceled or if certain regulatory conditions are not met.
*   Investors benefit from WI trading as it offers liquidity and mitigates market volatility by providing a preliminary market indication of demand before the actual issuance.

## How "When Issued" Transactions Operate

When-issued orders are conditional and may not complete if the offering is canceled. They are also called orders "with ice" or "when distributed," short for "when, as, and if issued."

Securities announced but not issued trade on a when-issued basis. The transaction settles only after the security is issued. A when-issued market allows trading of such instruments.

When-issued markets can provide an indication regarding the level of interest that a new issue may attract from investors. When-issued transactions are dependent upon the actual security being issued and the exchange or [National Association of Securities Dealers](https://www.investopedia.com/terms/n/nasd.asp) ruling that the transaction is settled.

## Real-World Example of "When Issued" Trading

An industrial [conglomerate](https://www.investopedia.com/terms/c/conglomerate.asp) plans to [spin off](https://www.investopedia.com/terms/s/spinoff.asp) its chemicals division because it's impacting earnings and has low margins. To do this, it will pay shareholders a dividend in the form of stock in the new chemicals company.

After the record date, when shareholders qualify for spinoff stock, they can trade the right to receive shares on a when-issued basis. Shareholders who buy rights but don’t hold conglomerate shares by the distribution date will receive their spinoff shares then, ending the when-issued market.

## Advantages of "When Issued" Transactions

When issued reveals demand for securities, attracting investors who might [avoid volatile markets](https://www.investopedia.com/articles/trading/08/strategies-for-volatile-market.asp). This can lessen volatility when securities are issued, as investors gain confidence in demand levels.

When issued helps develop the market for a new security by attracting investors, and it also offers investors liquidity prior to the actual distribution of the securities in question, allowing them to monetize financial assets more readily.

## The Bottom Line

WI transactions are made on a conditional basis for securities that have been authorized but not yet issued. They typically involve Treasury securities, stock splits, and new issues of stocks and bonds. When-issued markets can be indicators of investor interest in a new issue before its official release.

WI transactions provide liquidity and potential benefits, like reducing market volatility and facilitating investor confidence, but their conditional nature can result in cancellation of the offering.