Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

Serious question asked from a place of naïveness: how do you short at IPO assuming one doesn't already have stock?


Usually no borrow until 2 days after. You have to wait until shares hit lending pools (basically people saying they are willing to lend out their shares for a fee).

This doesn't happen until trades from the IPO "settle" t+2 (standard time for a trade from a buyer to a seller to be booked, and for a buyer to actually receive ownership of the shares. Ownership in this case meaning you can lend / margin them etc)

Options usually won't be listed for a week or so at the earlier until after the IPO, so whoever mentioned that below is wrong.

Varies deal to deal and if traditional listing / direct but that is the gist.


You cannot short an IPO.

You cannot short post IPO until the stock becomes marginable.

What you can do, if have a lot of $$, is have one of the desks immediately at after the IPO write you a synthetic short position using an over the counter option.


Yeah you can't do it through the platforms, but if you know someone bullish IRL there's nothing stopping you from making a meatspace agreement to sell them 100 shares of backblaze for $10 one year from today.


I think the SEC would view that as an unregistered put option (only legal for accredited investors), though I can imagine a gentleman’s agreement to quietly settle it in cash.


Yeah I mean, you also can't really bet on football games, but...


That does not account for the counter-party risk


Never short: capital is asymetric and you can be screwed by irrational spending faster than it dries out.


You cannot.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: