POS. Also known as the preliminary prospectus, the preliminary version or draft of an official statement, as issued by the underwriters or issuers and subject to change prior to the confirmation of offering prices or interest rates. It is the only form of communication allowed between a broker and prospective buyer before the effective date, usually to gauge the interest of underwriters. Offers of sale or acceptance are not accepted on the basis of a preliminary statement. A statement to that effect, printed in red, appears vertically on the face of the document. This caveat, required by the Securities Act of 1933, is what gives the document its nickname, "red herring."