What Is Holding Period In IPO?

The initial public offering, also known as the IPO lockup period, is a signed restriction that prevents shareholders of a company from selling the stock before the company goes public.

This period can vary, and it is usually happening anywhere from 90 days to 180 days since the day of the IPO.

How long do you have to hold an IPO?

90 to 180 days

What does holding period mean?

A holding period is the amount of time the investment is held by an investor, or the period between the purchase and sale of a security. In a long position, the holding period refers to the time between an asset’s purchase and its sale.

What is the average holding period of a stock?

1.92 years

What happens when IPO lockup expires?

Once past that date (the “lockup expiry date), these shareholders are generally free to trade their stock – unless they remain insiders. Since a lockup expiry releases a number of shareholders to trade, volume usually increases on that day and thereafter, increasing the liquidity or float of a given stock.

Can you sell an IPO immediately?

The Selling Process

Quick sellers of post-IPO shares are known as “flippers.” Their goal is to make a quick profit, usually selling their shares within a few days of purchase. Your IPO stock shares reside in your brokerage account, and you can sell some or all of them at any time.

Can you sell IPO on same day?

If you sell the stock on the first day of its listing or any time in the first year, you will have to pay ordinary income tax on the gains. If you have to qualify for the more advantageous capital gains tax rates, you have to sell the stock after the first year.