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Given the hype, the most likely scenario is a > 2X price spike in the first few minutes of trading regardless of the initial market cap ($100B+?). For those of
by throwaway803453 6y ago
Given the hype, the most likely scenario is a > 2X price spike in the first few minutes of trading regardless of the initial market cap ($100B+?). For those of us who believe that, what is the best strategy for purchasing shares ? It's doubtful brokers will allow market orders the previous night since the ticker might not yet exist, and if one places a market order during the first few minutes the cynic in me predicts a retail trader will get the worst deal.
- taurath 6y agoThis is always how it works. Institutionals always get first dibs (and the middle, and the last)
- Triv888 6y agoDo you see anything wrong with that?
- hntrader 6y agoAfter a new listing, retail can buy at the same instant as institutions, as long as the retail broker allows it, and many do.
- brainflake 6y agoWell not necessarily... didn't google use a dutch auction 15 years ago?
- bluedevil2k 6y agoNo, a Dutch auction a single product with the price ticking down. They used an OpenIPO auction format.
- harryh 6y agoNot with a direct listing. Coinbase shares would be subject to an auction and the market for them will open at the price where supply meets demand.
- bluedevil2k 6y agoNot entirely true - since people had to enter a single point on their demand curve as a price and quantity of shares (instead of their entire demand curve) the market clearing price was artificially low. Hence the price pop on day one. To think about it more in depth - assume I enter a bid of 100 shares at $100. If the market clearing price is $50, I’ll be awarded 100 shares at $50. However, I was willing to buy far more than that at a higher price, so I’d go buy more shares on the open market, driving the price up.
- deleted 6y ago[deleted]
- kortilla 6y agoBut the point is that everyone with a bid >=$50 got filled.
- solveit 6y agoIf I am willing to buy 100 shares at $100, I may be willing to buy 300 shares at $60. So just because my bid got filled doesn't mean I won't be buying more.
- harryh 6y agoIf you're willing to buy 300 shares at 60, but only 100 shares at $100 you can enter two bids: 100 shares at $100 200 shares at $60 This will satisfy your demand position.
- cbhl 6y agoIf the person has only 18000 though (300 at 60) then if they put in 100 at $100, they'll only be able to buy 133 at 60. I would still enter two bids; it's just a matter of adjusting how many at each level.
- svachalek 6y agoI think generally you can place an order before the market opens, maybe even the day before, but that doesn't really give you any pricing power. It will still pop at the open and your order may not clear until it does. But that may still put you ahead of the Robinhood masses. Better option might be to try a pre-IPO trading platform like EquityZen.
- throwaway803453 6y agoFrom EquitZen's knowledge center: "Shares that are the subject of investment through EquityZen are generally subject to a lock-up period of up to 180 days after the effectiveness of a company's IPO filing, during which time shareholders are restricted from selling their shares."[1] The 180day lock-up period could EquityZen poorly suited for investors with a short time horizon.
- svachalek 6y agoIn this case though, Coinbase is doing a direct listing, not an IPO. I think there is usually no lockup associated with a direct listing.
- deleted 6y ago[deleted]
- inadequatespace 6y agoEr, PLTR still had a lockup for its direct listing. If this trend continues the “usually” aspect will not hold.
- sidlls 6y agoThat only applies to IPOs. In a direct listing the shares start trading at the published reference price. There is no underwriting or other ceremony around it.
- jacobkranz 6y agoCould you do what Mark Cuban did and work with your brokerage to do sell calls & buy puts around the strike? That would lock in your price for a given amount of time.
- la6471 6y agoIf a SPAC is floated to do this retail investors might still have a chance
- nostrademons 6y agoThe SPAC would have to convince Coinbase that it's in their interests to go public via reverse merger rather than direct listing. This seems pretty unlikely, given that they've already filed their S-1, announced the direct listing, and presumably have done all the paperwork related to being a public company. There's a bit of an adverse-selection problem with SPACs: not only do they need to find an undervalued asset that the public markets will value for more than the acquisition price, they need to convince that asset that the SPAC adds value and can take them public easier than doing the process themselves would. Big tech companies like Coinbase, AirBnB, and Roblox have plenty of money to hire the lawyers, accountants, and investment bankers that going public themselves requires.
- throwaway3818 6y agoWhat you probably want is a snap to market order meaning that if you're buying, it will snap to the ask, selling, to the bid. I use snap mid orders, usually get decent fills without getting retail'ed.
- arcticbull 6y agoI’m not sure there are big pops on OTC listings, as the pop on an institutional listing is the difference between what they sold shares at to raise money the previous night and what the market values them at in real life. Since you’re not raising money in an OTC listing, trading should begin roughly at market price, no? I could be wrong I don’t really play IPOs. Well, SPACs, haha.
- kxxsc 6y agoYou can trade Coinbase shared pre-IPO on FTX (unfortunately, not available to US users). The stock trading infra seems weird but makes sense under the hood and is reliable (happy to answer any questions people have). https://ftx.com/trade/CBSE/USD https://ftx.com/trade/CBSE/USD (this was mostly informational, but if anyone actually decides to use the platform and wants to get 5% off trading fees, also happy to share a referral link)
- simonebrunozzi 6y agoDo you work for FTX? If so, best way to contact you?
- tutfbhuf 6y agoEither pre-IPO trading or wait until the dust settles and then decide whether to buy or not.