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Finance Dictionary and Glossary of Investment Terms
Underwriters, actual or potential, often seek out and "circle" investor interest in a new issue before final pricing. The customer circled has basically made a commitment to purchase the issue if it is available at an agreed-upon price. If the actual price is other than that stipulated, the customer supposedly has first offer at the actual price.
The term used to indicate which potential purchasers of an upcoming offering have agreed to buy at a specified price. The name derives from the fact that an underwriter or Registered Representative goes down a list of potential purchasers and circles those who commit to the purchase.