Pre-IPO Share CFDs FAQs
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- Am I buying shares in the company?
- What does the quoted price represent?
- How is the price calculated?
- Why can the market trade before the company is listed?
- Can the Pre-IPO Share CFD price move before the official IPO price is announced?
- Are the Pre-IPO Share CFDs available after the company starts trading on the stock exchange?
- How is the final settlement price calculated?
- What happens to my Pre-IPO Share CFD position before and at expiry?
- Can I keep the Pre-IPO Share CFD trade open after the first trading day?
- What happens if the IPO is delayed?
- Why might StoneX's price differ from another provider?
- What leverage applies?
- What are the main risks for trading the Pre-IPO markets?
- Can clients trade both rising and falling prices?
What is an IPO Market Capitalisation Product?
It is a market that allows clients to trade on the expected value of a company before and during its first day as a publicly listed company.
Am I buying shares in the company?
No.
You are trading a CFD product linked to the expected market value of the company. This CFD product does not provide clients with any ownership interest in the company, any right to acquire shares, or any participation in the IPO.
What does the quoted price represent?
The quoted price represents the company’s expected market capitalisation rather than the price of an individual share.
How is the price calculated?
Pre-IPO Share CFD prices are determined by StoneX using reasonably available information, including listing materials, company disclosures, analyst research, relevant market developments, movements in comparable listed securities, liquidity conditions, and risk management considerations.
Why can the market trade before the company is listed?
Although shares have not yet begun trading, markets often form a view on what the company is likely to be worth once trading starts. The Pre-IPO Share CFDs allow clients to speculate on the market’s expected valuation of a company that is anticipated to complete an initial public offering (IPO).
Can the Pre-IPO Share CFD price move before the official IPO price is announced?
Yes.
The CFD market may move as new information becomes available or as market expectations change.
Are the Pre-IPO Share CFDs available after the company starts trading on the stock exchange?
Yes.
The Pre-IPO Share CFDs remain available on a close only basis during the first day of unconditional trading.
How is the final settlement price calculated?
Settlement is based on the market capitalisation implied by the official closing share price at the end of the first day of unconditional trading.
What happens to my Pre-IPO Share CFD position before and at expiry?
You may close a Pre-IPO Share CFD during the specified dealing hours set out in the relevant Product Market Information available on the trading platform at any time prior to the last dealing time for the Pre-IPO Share CFD. You are responsible for being aware of the last dealing time and any spread that may apply when closing a Pre-IPO Share CFD. Any remaining position will be automatically closed using the final settlement value.
Can I keep the Pre-IPO Share CFD trade open after the first trading day?
No.
The Pre-IPO Share CFD product is designed to expire at the end of the stock’s first day of unconditional trading.
What happens if the IPO is delayed?
StoneX may amend trading arrangements, suspend trading, extend expiry dates or take other actions considered necessary to maintain a fair and orderly market.
Why might StoneX's price differ from another provider?
Pre-IPO Share CFDs are proprietary over-the-counter products. Different firms may use different assumptions, valuation methodologies and risk management approaches. Therefore, the expected market capitalisation used for the product may differ materially from the IPO price, the company’s actual market capitalisation once trading commences, or valuations applied by other CFD providers or market participants.
What leverage applies?
Pre-IPO Share CFDs are subject to the margin requirements set out in the relevant Product Market Information available on the trading platform and are subject to margin calls and margin close-out.
What are the main risks for trading the Pre-IPO markets?
The principal risks are:
- High volatility
- Rapid valuation changes
- IPO delays
- Uncertain market sentiment
- Potential for significant losses
Can clients trade both rising and falling prices?
Yes.
Clients may open both buy and sell positions subject to applicable trading limits set out in the relevant Product Market Information available on the trading platform.