IPO Share Lock Up Period Explained
When a stock first debuts on public markets through an Initial Public Offering there is a period of typically 90-180 days during which shares bought by investors at pre IPO prices cannot be sold, let's discuss!
This concept raises multiple questions and possible outcomes that both investors and short-term traders need to be aware of. In this video we discuss the purpose of the IPO share lockup period and also provide you with multiple different trade ideas to watch for on the lockup expiration date. When a large percentage of the IPO shares become available for sale we are presented with a possible shorting opportunity, if the IPO has performed well since its debut we can assume there will a certain amount of profit taking present on the expiration date. How can we take advantage of this possible sell imbalance? In this video we also show you multiple different examples of trades that provided excellent risk/reward and an easy structure for traders of any experience level!
? Outline:
0:00 Intro
0:44 What is happening when IPO lockup shares become available for sale?
2:03 Share on lockup can be released in smaller chunks, not all at once
4:51 When a stock is strong initial profit taking does not always result in an easy short
5:20 What type of trade are your looking for?
8:10 What happens when a weak IPO sees it's lockup period come to an end?
10:04 Summary