Entitlement Offer
Categories: Regulations, Trading
Your brother has a rare set of Buffy the Vampire Slayer commemorative shot glasses. Everyone in the neighborhood wants them, but no matter how much people offer, he refuses to sell.
One day, he announces that he’s selling all his possessions so that he can join a snake-handling cult in Arizona. He says he’ll sell you his set for $100. But the offer is only good for you. Anyone else has to pay market price. You have a day to decide, otherwise he’ll put it on eBay, where a similar set just sold for $500.
Your brother's offer to you represents an entitlement offer.
The term refers to an offer to buy or sell an asset that can't get transferred to another party. If the other party isn't interested, the offer becomes void. It's a just-for-you-type offer, valid just for the particular party, usually at a specific price and good only within a specific period of time.