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Yes, but before it tripled in price, it actually lost almost half its value. https://en.wikipedia.org/wiki/Initial_public_offering_of_Facebook#Subsequent_days

Yes, but before it tripled in price, it actually lost almost half its value. https://en.wikipedia.org/wiki/Initial_public_offering_of_Facebook#Subsequent_days https://en.wikipedia.org/wiki/Initial_public_offering_of_Fac...

MichaelGG 11y ago
So buy at IPO with options? In FB's example that'd have performed particularly well eh?
- chollida1 11y ago
  >So buy at IPO with options? In FB's example that'd have performed particularly well eh? There are no Options trading on IPO's. Typically options start trading 3 months after an IPO.
  - MichaelGG 11y ago
    Oh, interesting. I looked up recent IPOs on Nasdaq and ones from last month have options now. First Data (FDC) has been trading only 3 weeks and has options. But really low volume and ridiculous spreads. RACE has been trading only 3 weeks for less time and has more options. Perhaps they are exceptional due to their size? Not that this would help with FB a whole lot since it'd have dropped a fair amount by the time you could buy options.
    - jonknee 11y ago
      The rules aren't based on time, but basically on diversity of shareholders (there need to be a lot of shareholders and a lot of shares outstanding) which makes sense. You need 7m publicly held shares outstanding (many IPOs don't do this, a lot of shares are controlled by underwriters and insiders who can't sell at the IPO) at least 2,000 shareholders and some minimum trade volume. There's a minimum share price too, but that doesn't effect IPOs.
      - MichaelGG 11y ago
        Do you know where I can get the official docs on how options are controlled?
        jonknee 11y ago
        CBOE probably has them, or possibly through your broker, but they handle compliance so the nuance of the rules isn't terribly important (if you can buy or sell options for a security through your broker they have already met the standard). The numbers I mentioned are in the Federal Register, but quite a while ago. The numbers are still current, though other parts may have changed: http://www.gpo.gov/fdsys/pkg/FR-1994-02-07/html/94-2716.htm http://www.gpo.gov/fdsys/pkg/FR-1994-02-07/html/94-2716.htm

MichaelGG 11y ago

So buy at IPO with options? In FB's example that'd have performed particularly well eh?

chollida1 11y ago
>So buy at IPO with options? In FB's example that'd have performed particularly well eh? There are no Options trading on IPO's. Typically options start trading 3 months after an IPO.
- MichaelGG 11y ago
  Oh, interesting. I looked up recent IPOs on Nasdaq and ones from last month have options now. First Data (FDC) has been trading only 3 weeks and has options. But really low volume and ridiculous spreads. RACE has been trading only 3 weeks for less time and has more options. Perhaps they are exceptional due to their size? Not that this would help with FB a whole lot since it'd have dropped a fair amount by the time you could buy options.
  - jonknee 11y ago
    The rules aren't based on time, but basically on diversity of shareholders (there need to be a lot of shareholders and a lot of shares outstanding) which makes sense. You need 7m publicly held shares outstanding (many IPOs don't do this, a lot of shares are controlled by underwriters and insiders who can't sell at the IPO) at least 2,000 shareholders and some minimum trade volume. There's a minimum share price too, but that doesn't effect IPOs.
    - MichaelGG 11y ago
      Do you know where I can get the official docs on how options are controlled?
      - jonknee 11y ago
        CBOE probably has them, or possibly through your broker, but they handle compliance so the nuance of the rules isn't terribly important (if you can buy or sell options for a security through your broker they have already met the standard). The numbers I mentioned are in the Federal Register, but quite a while ago. The numbers are still current, though other parts may have changed: http://www.gpo.gov/fdsys/pkg/FR-1994-02-07/html/94-2716.htm http://www.gpo.gov/fdsys/pkg/FR-1994-02-07/html/94-2716.htm