Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Kicker

What it is:

In the finance world, a kicker is a feature that makes a security more attractive.

How it works (Example):

Often, kickers are equity kickers, which are the right but not the obligation to buy shares of the issuer of a bond. These equity kickers come with the bond, making them more saleable to investors.

Sometimes, kickers aren't useful. For instance, they might offer the bondholder the right to buy shares at $8 a share, which only comes in handy if the shares are trading above $8. In those cases, the bond issuer might increase the coupon rate instead.

Why it Matters:

Kickers get deals done. They make securities more saleable, and they help companies raise the capital they need to raise to grow. For investors, kickers can raise the gains or profits they might earn on a security.

Related Terms View All
  • Auction Market
    Though most of the trading is done via computer, auction markets can also be operated via...
  • Best Execution
    Let's assume you place an order to buy 100 shares of Company XYZ stock. The current quote...
  • Book-Entry Savings Bond
    Savings bonds are bonds issued by the U.S. government at face values ranging from $50 to...
  • Break-Even Point
    The basic idea behind break-even point is to calculate the point at which revenues begin...
  • Calendar Year
    If Company XYZ starts its fiscal year on January 1 and ends its fiscal year on December...