It’s one of the most common questions we get here at Nasdaq: what time do IPOs start trading? The answer, unfortunately, is not as straightforward as you might hope.
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Introduction
If you’re interested in buying shares of a company that’s going public, you’ll need to know what time the IPO starts trading. The initial public offering (IPO) process is complex, and there are a few different times that you need to be aware of. Here’s a look at what time IPOs start trading and how the process works.
The Opening Bell
Most IPOs begin trading around 9:30 or 10:00 in the morning, but there are exceptions. Some IPOs, particularly those of big name companies that are already well known to investors, may have their stock begin trading earlier in the day. Other IPOs may begin trading later in the day or even the next day.
The time an IPO starts trading is important because it affects how much “buzz” there is about the stock and how volatile the price will be. If a stock starts trading early in the morning, there may be more interest from traders who want to get in on the action before the price starts to fluctuate too much. If a stock starts trading later in the day, it may be more stable because there has been less time for news to come out about the company and for emotions to play a role in driving the price up or down.
The Process of an IPO
An IPO, or initial public offering, is the process by which a privately held company raises funds by selling shares to the public. The shares are then traded on stock exchanges. IPOs can be a way for companies to raise money and expand their businesses, but they can also be risky for investors.
The IPO process begins when a company files paperwork with the Securities and Exchange Commission (SEC). This paperwork includes information about the company’s financials, business plans, and risk factors. The SEC reviews the paperwork to make sure it is complete and accurate.
Once the SEC gives its approval, the company can begin marketing the IPO to potential investors. The company will set a price range for the shares and work with an investment bank to underwrite the offering. The investment bank will help market the IPO and sell the shares to investors.
When everything is ready, the company will announce a date for the IPO. On that date, the shares will begin trading on one or more stock exchanges. Investors who buy shares in an IPO might see them rise in value if the company is doing well, but they could also lose money if the company is not doing well.
After the IPO
After the IPO, a company’s stock is traded on the secondary market. The price of the stock is determined by supply and demand among investors who trade on exchanges or directly in the over-the-counter market. The first trade in a stock usually occurs at a price that is different from the IPO price.
Conclusion
In conclusion, IPOs can start trading as early as 9:30 AM EST, but the majority of them start trading closer to 11:00 AM EST. Most IPOs will have their first trade within the first hour of trading, but there are some that may take longer. It is important to remember that not all IPOs will start trading on the same day, so it is important to check with your broker or financial institution to find out when the IPO you are interested in will start trading.
