IPO trading is buying and selling shares of a company when it first becomes publicly available on a stock exchange. IPO trading plugs you into the dynamic price movements of newly listed companies as they enter the public market. Here’s a brief overview of what IPOs are, how they work, and why they matter.
An initial public offering, or IPO, is when a private company lists its shares on a stock exchange for the first time, allowing public investors and traders to take a position on them. IPOs provide companies with capital to expand, repay debt, or invest in new projects.
This funding can kickstart business growth, scale operations, or fuel strategic moves – factors that may influence the stock’s performance post-listing.
To fully understand the process, check out our in-depth guide on IPOs.
The IPO process involves several steps, including selecting investment banks, preparing regulatory filings, setting an offer price, and listing on an exchange. All that can take several months or longer – but once shares are publicly available and we’ve added the stock as a CFD to our platform, you can trade them based on market demand.
IPOs enable you to capitalise on early price action within minutes of a stock’s listing. IPO stocks often see sharp moves as the market reacts to demand, making them potentially attractive for short-term strategies.1
When you trade IPOs with CFDs, you don’t need to own the stock outright – you can just take a position on the underlying price moves. CFDs also provide leverage, enabling a larger position with a relatively small outlay. This magnifies potential profits, but also losses – making leveraged trading risky.
*Past performance is not a reliable indicator of future results.
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