When a stock is listed on an IPO, there are many stocks whose price jumps at the initial price. If you win as a result of participating in a lottery to get IPO shares, you will be wondering whether it is better to sell at the initial price or whether it is profitable to sell after waiting for a while and then selling. Also, even if you do not win the lottery, if you get it at the initial price, the price will often increase after that, so even in that case it is difficult to sell.
In this article, I will introduce the points of initial price selling of IPO stocks after holding down how to sell IPO stocks. At the same time, I will explain the points of how to sell IPO secondary investment.
It is useful for those who are interested in stock investment. If you want to expand the range of stock investment or start investing in stocks, please read it.
Review how to sell IPO stocks
The timing of selling IPO stocks can be roughly classified into three timings (initial price sale, secondary, holding for a while and then selling). First, let’s review how to sell IPO stocks.
What is the initial price sale of IPO stocks?
The initial price sale is to sell the IPO stock obtained at the public offering price at the price that was first listed on the stock market. The initial price sale is a royal road when you win an IPO.
IPO stocks often have a high initial price and then fluctuate. By selling at the initial price, you do not have to worry about the fluctuation of the stock price, and there is a high probability that you can sell it at a price higher than the price you got, so it is often selected as a stock trading tactic.
Selling shares acquired through IPO secondary investment
IPO secondary investment is an investment method in which IPO shares are bought or sold after listing. While it is easy to make a big profit from the initial price sale of IPO shares, you cannot participate unless you apply for a public offering and win, so not everyone can participate. However, since it is a listed stock in IPO secondary investment, anyone who has an account with a securities company can participate.
By buying and selling at the right timing immediately after listing, where stock prices tend to fluctuate, you can expect high returns if you do not misunderstand the timing of selling, although it is a high risk.
Hold for a while and then sell
IPO stocks are stocks of companies that are expected to grow in the future, so there are many companies that have potential. In some companies, the stock price can be multiplied by holding it in units of months or years. If you carefully check the performance and business of the company that bought the stock and decide that it is likely to grow rapidly, it is a good idea to hold it for a while and see how it looks.
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Point of initial price sale of IPO stock
When selling a newly listed IPO stock at the initial price, it is essential to hold down the points. Therefore, I would like to introduce some points to be aware of when selling IPO stocks at the initial price.
Stock prices tend to rise due to high demand
Many investors are paying attention to IPO stocks and are looking to buy at the initial price. High profits can be obtained by identifying stocks that are in high demand and selling the stocks whose stock price is higher than the public offering price at the initial price.
Many investors are paying attention to IPO and the market is revitalizing
Since many IPO stocks are growing or are expected to grow in the future, the initial price is often higher than the public offering price. If you sell at the initial price, you can expect a profit, which will flood investors who want to buy and sell, and the stock price will rise easily.
Some stocks are volatile
Many investors are paying attention to buying at the initial price even if they fail the public offering of IPO shares. Since the market is more active than ordinary stock trading, the stock price is likely to rise above the public offering price, and there is a high possibility that high profits can be obtained by selling at the initial price.
In some cases, the price may drop
In 2019, most IPO shares had an initial price higher than the public offering price. However, in the first half of 2020, due to the influence of social conditions, some stocks were negative. In addition, the price may drop after the initial price is set. Be aware that the price will not necessarily be higher than the public offering price, so let’s start trading IPO shares.
Points of selling in IPO secondary investment
For IPO secondary investment that you can participate in without winning an IPO, it is important to distinguish between selling and buying. Here, we will introduce the points of selling when making an IPO secondary investment.
Buy when it falls and sell when it goes up
After IPO stocks are listed and hit their initial prices, stock prices often fluctuate. You can make a profit by watching the price movement of the stock price and buying it if you think it has fallen, and selling it if the stock price rises.
Timing is important, so the point is to use online securities that you can buy and sell at hand.
Note that there are risks
Stock prices fluctuate, so even if you think you bought at the bottom price, it does not always go up. Let’s understand that there is a risk that you will not be able to make a profit in a short period of time because the price is volatile.
We also recommend buying an IPO that is open to the public
Among IPO stocks, there is also a so-called “public offering cracked IPO” in which the initial price is lower than the public offering price set by the securities company. It can be said that it is a cheap stock because it is a stock that has not received much attention from the market.
Orders may gather on IPO stocks that are under public offering and the stock price may rise, or if you hold it for a long time, the stock price may gradually rise, so if you think that growth is expected, you should buy it ..
I also want to read: What is secondary? Basic knowledge of investment that can not be heard now
Points on how to sell IPO stocks
When you sell an IPO stock, you may not be able to make a profit just by selling it somehow. Here are some points about how to sell IPO stocks.
Beware of stocks that are likely to drop
Even if you can get IPO shares at the public offering price, if the initial price is lower than the public offering price, you will lose if you sell at the initial price. Please be careful if there are any factors that are likely to reduce the price, referring to the financial results, online forecasts, and whether the latest is in the red.
If the IPO stock you get at the public offering price is likely to drop, you may want to hold it for a long time without selling it at the initial price.
Fees will be charged at the time of sale
One of the factors that makes IPO stocks popular is that there is no purchase fee when they are obtained at the public offering price. However, the sale will incur the same fees as regular stock trading. Depending on the securities company, the fees may be high and you may not be able to make as much profit as you think.
It is important to select and buy and sell securities companies, remembering that you will be charged a commission when selling.
When you buy or sell an IPO stock and make a profit, you are usually taxed on the profit. The tax rate is 20.315% of profit, which is about one-fifth. However, if you are trading stocks with a NISA account, you will be exempt from tax up to 1.2 million yen for up to 5 years. If you have IPO shares that you can buy and sell with your NISA account, you can save tax by using them.
I also want to read: What is the difference between NISA and freshly-picked NISA? Easy-to-understand explanation from basics to operation methods
If you win a public offering of IPO shares to get the shares of a growing company, the quickest way to make a profit is to sell at the initial price. In the case of popular IPO stocks, it can be several times the public offering price, and you can immediately make a profit by selling at the initial price.
However, depending on the business situation and social situation of the company, the initial price may be lower than the public offering price, so it is important to determine it while referring to the financial results and forecasts.
Also, if you cannot get the IPO shares through the public offering, you can make a profit by getting them after listing and selling them. Stock prices often fluctuate immediately after listing, so it is important to understand and assess the risks when buying and selling.
Fees will be charged at the time of sale and income tax will be charged on profits, so let’s devise a way to sell IPO shares so that you can make as much profit as possible while using NISA.