IPO and Prop Trading

[Rocket Scientist]

Can you buy IPO on Primary offering and sell it on secondary right away as a prop trader?

 

[Robert Morse]

I don't believe a registered member of a Prop Trading firm that is a broker dealer can buy an IPO on the offering at all.
5130. Restrictions on the Purchase and Sale of Initial Equity Public Offerings

http://finra.complinet.com/en/display/display.html?rbid=2403&element_id=4894

 

[Vikram Ravishankar]

A prop can only trade an IPO once shares hit the secondary market. You can always get the primary delivered into your outside retail brokerage account.

 

[Robert Morse]

ou can always get the primary delivered into your outside retail brokerage account.

Not legally.

 

[Rocket Scientist]

Damn...
Just imagine using prop trading firm's leverage to get IPO and sell it on secondary.

 

[Robert Morse]

Just imagine using prop trading firm's leverage to get IPO and sell it on secondary.

Even if you were a "customer" and not a registered person, IPOs can't be leveraged and must be paid in cash.

Bad news Bob