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What is an IPO and how does it work?

An Initial Public Offering (IPO) allows traders to gain exposure to a company's shares for the first time. Find out what the IPO process is and how to take a position with IG.

An initial public offering (IPO) is one of the methods companies use to go public, that is, their stock is made available to retail traders and investors. The company then decides how many shares it wants to offer for sale and an investment bank suggests the initial price of the shares based on the estimated supply and demand for them.:

Trading IPO stocks may present more risk than gaining exposure to established stocks due to the unpredictability of going public.

How to negotiate an IPO?

At MVF, you will be able to trade an IPO on listing day by placing an order as soon as the stock begins trading on the stock exchange.

You can start trading the shares as soon as the IPO ends, at which point they are listed on a stock exchange (the secondary market). With us, you can position yourself up (going long) or down (going short) on stock prices using Contracts for Difference ( CFDs ). They allow you to gain exposure to a company's stock price without becoming an owner.

CFDs are leveraged, meaning you will be able to gain increased market exposure by making a small deposit rather than paying the full value of your position. However, your wins and losses will be calculated from your total position size and may be significantly larger than your deposit. In this sense, IPO trading is generally riskier than directly acquiring shares.