What is making-up price?
A historic term for the settlement price at which unpaid for securities are carried over from one account to the next.
Where have you heard about making-up price?
The term was primarily used in the London and other British Stock Exchanges in the nineteenth and early-twentieth century.
What you need to know about making-up price.
A speculative investor may wish to carry over securities from one account to the next. The price of the securities would be fixed on the carry-over day, but the investor wouldn’t have to pay for the securities until the next accounting period. The price they would pay is called the ‘making-up price’, set as the market price at noon on the carry-over day. On the settling day, the buyer would pay or receive the difference between the making-up price and the contract price.
The term was also used in New York where making-up prices were fixed at the end of the day as per the American system of daily settlements.