If you are here, you are interested in the IPO Allotment. When you hear about investing in IPO stocks (initial public offering), beginners may imagine that it is a difficult investment you need help understanding, but that is a big mistake. IPO stocks are an investment that is recommended even for people who have yet to become accustomed to stock investing. This is because IPO stocks have the advantage of not requiring too many difficult investment decisions, their prices tend to rise, and the risk of loss is low. In other words, by simply purchasing IPO stocks and selling them at the initial price without thinking, there was an incredible probability of making a profit on 9 out of 10 stocks. Conversely, only 1 out of 10 IPO stocks lost money at the initial price. Also, one of the major attractions of IPO stocks is that the initial price can soar many times higher. Today, we will share with you some tips for IPO Share Allotment.
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Strategy For IPO Stocks Allotment
You cannot purchase IPO shares unless you win the lottery, so apply from multiple securities companies: Unlike regular stocks that are bought and sold on the stock market, IPO stocks are sold at a predetermined price and a certain number of shares. However, because IPO stocks are so popular, for most stocks, the number of people wanting to buy them is overwhelmingly greater than the number of shares being offered for sale. When it comes to regular stock investing, the most important thing is to identify stocks that will go up. On the other hand, in the case of IPO stock investment, the important question is “how to get through the narrow gate of the lottery and obtain the right to purchase IPO shares.”
So, how can you increase your chances of winning with IPO stocks? The most basic strategy is to apply from many securities companies. IPO stocks are handled by a specific securities company for each issue, and each securities company handles a fixed number of IPO shares. The lottery for IPO stocks is held by each securities company, so the more securities companies apply and are eligible for the lottery, the higher the probability of winning.
If you trade online, it won’t take much effort to open accounts at multiple securities companies and apply for IPO stocks from each one. There is a saying that “over-the-counter trading allows you to purchase IPO stocks without relying on lottery tickets,” and that is true. However, to have IPO stocks traded through over-the-counter trading, a certain amount of assets and a trading track record are required. Because securities companies are also businesses, they give priority to IPO stocks to “ich people who are likely to use the money in the future.”
Also, some people say, “Most of the IPO shares allocated to securities companies are allocated to over-the-counter transactions, and very little goes to people who trade online,” but that is not the case. Recently, securities companies have improved their services for online investors, and many securities companies allocate 100% of their allocation to themselves, and even fewer securities companies allocate about 10% to investors who trade online, and draw lots fairly. Considering this, the correct answer for individual investors who do not have a large amount of capital, especially beginner investors, is to apply for IPO stocks through internet trading and take on the challenge of a “fair lottery” that is not influenced by the amount of funds or trading performance.
First, open an account with a securities company that has a high probability of winning IPO stocks. For IPO stocks, the chances of winning are higher if you apply from as many securities companies as possible, so some individual investors who are serious about IPO investing open accounts with more than 10 securities companies. There are also quite a few.
However, it may be difficult for beginner investors to suddenly open accounts with more than 10 securities companies. Not only does it become difficult to manage the large number of securities companies you use, but you also cannot utilize that many securities companies unless you have sufficient funds. Most brokerage firms require purchase funds to be deposited into an account before the IPO stock draw. For example, if you apply for 100 IPO shares with a public price of 2,000 rs, you will not be eligible for the lottery unless you have more than 200,000 rs in your securities account. In other words, to apply from 10 securities companies, you will need 2 million rs in funds. Conversely, if you only have 1 million yen to invest, even if you have accounts with 10 securities companies, you will only be able to apply from 5 companies.
Some securities companies do not require you to deposit purchasing funds before the lottery. So finding such companies by search. These securities companies do not require advance deposits when applying for an IPO; all you have to do is deposit the purchase price at the time of applying for the purchase after the winner has been determined. This is a recommended securities company for people who want to invest in IPO stocks with limited investment funds.
However, only a few securities companies allow you to apply for an IPO even if you don’t have money in your account, and most securities companies have a “full advance payment system” that requires you to deposit the drawing.
As we explained earlier, to apply for an IPO from a securities company that uses the “full advance payment system,” you need to purchase funds equal to the number of securities companies you are applying to, so it is not realistic to apply from all the securities companies that handle it. In other words, if you want to increase your chances of winning and invest in IPO stocks more efficiently, it is important to choose a securities company that has a higher chance of winning.
The “lead manager” may be allocated 100 times more IPO shares than other securities companies, making it an overwhelming advantage: So, how should you choose a securities company that has a high chance of winning? The first thing everyone thinks about is a securities company that handles a large number of IPO stocks. IPO stocks cannot be applied for through just any securities company; each stock has its own securities company. Naturally, the more IPO stocks a securities company handles, the more stocks it can apply for. Conversely, there is no point in investing in IPO stocks by opening an account with a securities company that barely handles IPO stocks. However, it cannot be said that securities companies that can apply for a large number of IPO stocks have a higher chance of winning. This is because there are securities companies that are easy to win and securities companies that are difficult to win. Even if the number of applications you can apply for is reduced, your chances of winning will be higher if you apply from a securities company where it is easy to win, rather than applying from many securities companies where it is difficult to win. So, what is the difference between “a securities company that is easy to win” and “a securities company that is difficult to win”? The most important thing is whether or not the company is acting as the “lead manager. ” A securities company that provides various support when a company goes public on an initial public offering (IPO) is called a “manager,” and a securities company that plays a central role is called a “lead manager.” Normally, the lead manager and manager, as well as the “entrusted manager (back manager)” who is entrusted by the lead manager and manager to sell IPO stocks, are the securities companies handling the IPO stock. As mentioned above, the IPO shares to be sold are allocated to each securities company, but the number of shares allocated is overwhelmingly to the lead manager. Depending on the issue, in most cases, around 80-90% of the number of shares offered is allocated to the lead manager. A large number of IPO shares are allocated, which means that many people can win and purchase them. In other words, the more you apply through the securities company that acts as the lead manager, the higher your chances of winning.
8 Tips To Increase Your Chances of Winning an IPO:-
1. Aim for winning the IPO with ingenuity and persistence: Rich people and ordinary people have different approaches to winning an IPO. Ordinary people (common people) participate in as many managing securities as possible and aim to win the IPO! Rich people have an advantage over ordinary people with financial strength ranging from tens of millions of rupees to hundreds of millions of rupees. One securities company is enough.
In IPO for the common people, we introduce tips for increasing the success of IPOs targeted at the general public. For the general public, apply for the lottery and aim to win the IPO!
2. Aim to win an equal lottery with one person, one vote: You should apply steadily in the equality lottery and win the IPO. There are three main ways to receive IPO shares, but the recommended method for ordinary people who don’t have a lot of financial resources is to participate in an IPO through a securities company that uses an equal lottery system with one person, and one vote. Since winning is not influenced by financial strength, it is easy for ordinary people to win an IPO.
3. Increase IPO lottery opportunities: What should we do to aim for an IPO? The best way to increase your odds of winning an IPO is to increase your lottery chances. In other words, let’s participate in the lottery! Get a few hits! However, if you do not correctly understand how to increase lottery chances, you will not be able to increase lottery chances. Increase your chances of winning by increasing the number of participants x increasing the probability of winning.
4. Open an account with multiple securities companies and participate in the IPO: Open an account at a securities company where it is easy to become a manager. The securities companies that can participate in the lottery vary depending on the IPO. (referred to as managing securities). Having accounts with multiple securities companies increases your chances of participating in an IPO. This is the basics of winning an IPO, so check out the recommended securities companies and increase the number of accounts you open.
5. If your family also participates in the IPO, your chances of winning will more than double: My daughter won this month. She has three family members, so her chances of winning are three times higher. Equal lottery is a lottery method where one person has one vote and is not influenced by financial strength. If one member of your family participates, your chances of winning double.
6. Lose your luck at a securities company that doesn’t require lottery funds: Some securities companies allow you to participate in IPOs even if you do not have lottery funds. Among the securities companies that allow you to invest in IPOs, some allow you to participate in IPOs without requiring lottery funds. In other words, you can participate in the IPO even if you have no deposit to the securities company, so feel free to participate. The number of securities companies targeted is increasing year by year, including major companies. It’s a great help for ordinary people who don’t have enough money.
7. IPO participation even from mid-sized and hidden securities companies: Medium-sized securities companies are a good target because they have a large number of managers but few participants. Do you know of a mid-sized securities company that handles a large number of IPOs even though it is less well-known than the major companies? It is surprisingly little known and is a hidden gem for winning IPOs. The fact that it’s not well-known means that there aren’t many competitors in the lottery. To increase the number of IPO wins through IPO investment, aim for IPO wins from mid-sized securities companies.
8. The path to winning an IPO is persistence, effort, and patience: An IPO is like a lottery where you participate in a lottery and wait to win. It’s not easy to win, but unlike the lottery, it doesn’t cost money! Even if you don’t get selected in the lottery, don’t give up and keep applying! If you can put into practice the tips introduced on this page, the rest is your luck!