One of the questions I get asked all the time is, “What time does XXX start trading?”
If you’ve never played an IPO on its stock market debut, you probably assume that the stock will begin trading at the market open on the day of its IPO. You log into your trading platform, and see the IPO price, maybe you even enter an order hoping to buy it right at 9:30 AM EST.
The opening bell rings, but to your dismay, nothing happens. You refresh your screen, but all you see is the IPO price, and no movement in the stock. Confusion and frustration set in, and you start wondering if something is wrong with your account, or maybe you made a mistake and it’s the wrong date.
But eventually you figure out that despite being the right date, newly minted IPOs do NOT begin trading the minute the stock market opens. So what gives?
When is this stock going to be available for the general public to buy?
Along with other helpful live news updates on IPOs provided by Benzinga Pro, the information on WHEN an IPO debut would open for quote, along with an estimate on when it would start trading, has been a very valuable piece of information to help me schedule and organize my time on key IPO plays.
So here’s the deal, there is no set time at which an IPO will begin trading on the public market.
How can that be? Well, there is a process by which the underwriters and market makers will be pairing shares from those who bought the IPO and want to sell right away with buyers who want to purchase the IPO immediately on the debut.
And they will take as long as they need to in order to balance the number of shares being offered at a given price against the number of shares with buy orders for those shares (at that price). During this time, the ‘indication price’ will inevitably fluctuate quite a bit as they test different price points and buyers and sellers jockey their orders accordingly.
This is not a post about setting your order to make sure you get in at the debut price – I’ll cover that later. But it is helpful to get the information on WHEN the shares will begin pricing, as this will allow you to start watching the indication price and adjust your Limit Order accordingly in order to make sure you buy in the moment the stock does eventually go live.
Unfortunately, there aren’t too many resources that allow you to get this information. The one source that I rely on for this information is Benzinga Pro (you can signup using this link here:
GET BENZINGA PRO
To get the opening bid time, you can use the ‘Newsfeed’ tool and enter the ticker for the stock you’re wanting to watch.
While this information is not provided for every IPO, it does appear for most of them, and it helps me make sure I don’t miss the opening quotes, especially on days where there a multiple IPOs that I am trying to trade.