IPO trading

What is an IPO?

An IPO stands for initial public offering, it’s the first time a private company sells shares of its stock to the public. The process is often referred to as ‘going public’.

For companies, listing their shares on a stock exchange gives them the chance to raise capital for growth initiatives and to raise their profile. For traders and investors, an IPO is an opportunity to get in on the ground floor of growing companies or take a position on volatility.

Learn more about what an IPO is and how the process works.

During 2020 and 2021, we saw an increase in companies choosing to go public via a SPAC – or special purpose acquisition company. By merging with another company, private firms can ‘go public’ without the need for a traditional IPO. SPACs became popular as they’re quicker and less regulated than the normal IPO process.

Find out more about SPACs.

How to trade IPOs

Take a position on popular IPOs as soon as the shares list in four simple steps:

1. Open an account, or log in if you’re already a customer
2. Search for the company you want to trade
3. Choose your position and size, and your stop and limit levels
4. Place the trade and monitor the market

Remember, when you trade IPOs with leveraged products – like CFDs – both your potential profit and your potential loss are magnified. This makes it vital you take steps to manage your risk.

Learn about risk management.