IPO Hedge Fund Position question

They will have you develop relationships with institutional "sales traders" by running a lot of cosmetic trades at full commission. That is, You'll simultaneously buy and sell the opening price of a stock at two different brokers. You will incur a net loss of .04 - .06 per share. You will do a lot of this, and you will be instructed to give the impression that you are a very large value fund. The volume you generate will be the brokers impetus to allocate new issue shares.
These operations got very profitable in the late 90,s, but became obsolete as the IPO market came to a practical halt.
Sounds as though someone thinks there will be a revival.
 
Quote from GatorTrader:

You need to cold call brokers to see which brokers are big enough to get you good allocations.
Once you have a network of 5-10 brokers, then they will make you take all of their new issues.
You make money on the big movers and break even on the others. Its a win-win for the broker who makes nice commissions, and win-win for you, because you get ipo's.
Is this a valid way to trade?
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every broker is "big enough" its how big you are as a client that will determine what you get. i dont think buying lots of LU these days will get you anywhere. big boys on wall street got burned by one firm most of us know, there is nothing in it for them to be dealing with some no name flipping investor. if you are going to do it stick with one or two reputable names and do all the "trading" with them, while dumping to some minor league regional b/d,if you start spreading it around it wont be enough to get you anything.
 
Quote from GatorTrader:

Does anyone know of any IPO fillpers, or know of recent 1st day performance of IPO's?
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professor Jay Ritter of the University of Florida is regarded as one of the world's foremost experts on IPO research.

here is his webpage

http://www.cba.ufl.edu/fire/programs/msf/courses_faculty/faculty/facultyinfo.asp?WEBID=1027

excellent 2 papers on the subject to start with

http://bear.cba.ufl.edu/ritter/Do Todays Trades _ Oct252005.pdf

http://bear.cba.ufl.edu/ritter/Monnew 12-19-05.doc
 
Quote from GatorTrader:

I met with an office that gives you capital to buy IPO's, and then you sell the ipo on the day of the opening. So you get allocations from brokers, and then split profits with the firm once you sell.
Has anyone heard of this? Or had any experience?
Doesn't pay a salary, benefits, etc. 1099 pay.
Would you go with this, or a prop trading firm? Both don't require capital. Prop has tape reading, chart patterns, scalping, strategies.
Which is the best route to take? I've been a broker for 7 years. I need a change.
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did you guys get a piece of the Chipotle IPO today?
it must be much harder to get in on the action these days.
 
The origional poster asked a question. Has anyone heard of this type of "oppourtunity"

It sounds strange to me. Can you get in trouble for buying IPO's for someone else?

What if the IPO tanks...... you loose %100

And if it takes off ......... you only gain %50

Anyone have the answer to this business... Is this type of scene Illegal or sketchy to work with
 
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