In financial markets, "nil paid" refers to a situation where shares are traded without any consideration or payment being made by the buyer at the time of the transaction. This typically occurs during rights issues or rights offerings, which are events where a company offers existing shareholders the opportunity to purchase additional shares at a discounted price.

When a company announces a rights issue, it provides existing shareholders with the right to acquire new shares in proportion to their current holdings. These shares are often offered at a discounted price compared to the prevailing market price. The term "nil paid" is used to indicate that no payment is required upfront when subscribing to these new shares.

During a rights issue, shareholders have the option to either exercise their rights by subscribing to the new shares or sell their rights to someone else. If they choose to exercise their rights, they can acquire additional shares without making an immediate payment. However, they will typically be required to pay for the shares at a later date when the subscription period ends.

Nil paid refers to newly issued shares that have been allocated to shareholders but not yet paid for. These shares are typically offered in a rights issue, where existing shareholders get the first chance to buy additional shares at a discount. Until payment is made, the shares are called nil paid rights and can be traded separately on the stock exchange.

Investors who receive nil-paid shares have three choices: (1) pay for them and receive fully paid shares, (2) sell their rights in the market, or (3) let them lapse, usually forfeiting their value. If not paid for by a set deadline, nil-paid shares may be sold or reallocated by the issuing company.