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IPOs

Trading new stocks at TD Ameritrade


An initial public offering, or IPO, is when a private company becomes a public company by offering shares on a securities exchange such as the New York Stock Exchange or NADSAQ. Private companies "go public" for a variety of reasons: maximizing shareholder value; providing liquidity to investors and employees; raising capital to reinvest and grow business; and using stock as a currency for mergers and acquisitions.

On occasion, TD Ameritrade will act as a member of the selling group for IPOs. When we do, we can offer qualified accounts the opportunity to participate.

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Investing in an IPO

Investing in an IPO

If you are not yet a client and wish to apply to purchase shares of newly issued stock available through TD Ameritrade please call 800-454-9272 or open your account.

If you are a current TD Ameritrade investor and would like to purchase an IPO, log into your account and select IPOs from the Trade tab, or call 866-678-7233 for assistance.

What you should know about IPOs

Participating in a new IPO through TD Ameritrade allows you to purchase stock at the IPO price. The IPO price is determined by the investment banks hired by the company going public. If you meet eligibility requirements and TD Ameritrade is participating in the IPO you are interested in, you can place a conditional offer to buy. Be sure to read the preliminary prospectus prior to submitting a conditional offer to buy in a new IPO. Placing a conditional offer to buy does not mean that you will receive shares of the IPO.

It is important to note, that your ability to obtain shares of any new issue security may be significantly limited because overall demand for the IPO may far exceed the actual supply of shares coming to market. After the IPO has been issued, shares will begin trading on the market shortly thereafter. Most investors will be able to access those shares more readily.

TD Ameritrade generally begins accepting COBs (Conditional Offers to Buy) one week prior to expected pricing date. Depending on where the IPO prices, it may be necessary to reaffirm your conditional offer to buy. Allocations are based on a scoring methodology. If you receive an allocation, the shares will post to your account the morning the IPO is expected to trade on the exchange.

Eligibility requirements

To purchase IPO shares, you must open an account with TD Ameritrade, then complete a personal and financial profile, and read and agree to the rules and regulations affecting new issue investing. Each account being registered must have a value of at least $250,000, or have completed 30 trades in the last 3 months. Accounts must also meet certain eligibility requirements with respect to investment objectives and financial status. Your eligibility information will be validated each time you want to purchase an IPO. You must complete and submit an IPO Eligibility Form in accordance with FINRA Rule 5130 before you can be deemed eligible to participate.



For more information, contact us at 866-678-7233.

Funding your account

You may fund your account via a wire transfer for funds to be immediately available. Electronic funding can be used to purchase IPO stocks 3 business days after the deposit settlement date. Typically at TD Ameritrade shares of recently IPO’d stocks trading in the secondary market are not marginable for some time after the IPO.

 

Do you have questions about the IPO?

 

Please read our Frequently Asked Questions regarding funding and IPOs.

IPO risks and requirements

Be sure to read the prospectus before investing in an IPO.

 

Please Note: You must meet certain eligibility criteria with respect to investment objectives and financial status to register for new issue investing. TD Ameritrade is not endorsing any particular investment by making it available. IPOs may not be suitable for all investors. You must determine whether a particular security is consistent with your investment objectives, risk tolerance and financial situation. IPOs are non-marginable for the first 30 days.

 

IPO Risk Disclosure Statement

 

Rules and Regulations for New Issue Investing

As we see it

The Ticker Tape is our online hub for the latest financial news and insights from our experts. Here are a few suggested articles about IPOs:

 

 

Read more on The Ticker Tape


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Before investing in an Initial Public Offering, be sure that you are fully aware of the risks involved with this type of investing. There are a variety of risk factors typically associated with investing in new issue securities, any one of which may have a material and adverse effect on the price of the issuer’s common stock. For a review of some of the more significant factors and special risks related to IPOs, we urge you to read our Risk Disclosure Statement.

Trading futures and forex involves speculation, and the risk of loss can be substantial. Clients must consider all relevant risk factors, including their own personal financial situation, before trading.

Trading foreign exchange on margin carries a high level of risk, as well as its own unique risk factors. Forex investments are subject to counter-party risk, as there is no central clearing organization for these transactions. Please read the following risk disclosure before considering the trading of this product: Forex Risk Disclosure

 A forex dealer can be compensated via commission and/or spread on forex trades. TD Ameritrade is subsequently compensated by the forex dealer. Futures and/or forex trading privileges subject to TD Ameritrade review and approval. Not all account owners will qualify.

Futures accounts are not protected by the Securities Investor Protection Corporation (SIPC).

*Offer valid for one new Individual, Joint or IRA TD Ameritrade account opened by 03/31/2017 and funded within 60 calendar days of account opening with $3,000 or more. To receive $100 bonus, account must be funded with $25,000-$99,999. To receive $300 bonus, account must be funded with $100,000-249,999. To receive $600 bonus, account must be funded with $250,000 or more. Offer is not valid on tax-exempt trusts, 401k accounts, Keogh plans, Profit Sharing Plan, or Money Purchase Plan. Offer is not transferable and not valid with internal transfers, TD Ameritrade Institutional accounts, accounts managed by TD Ameritrade Investment Management, LLC, current TD Ameritrade accounts or with other offers.   Qualified commission-free Internet equity, ETF or options orders will be limited to a maximum of 500 and must execute within 60 calendar days of account funding. Contract, exercise, and assignment fees still apply. Limit one offer per client. Account value of the qualifying account must remain equal to, or greater than, the value after the net deposit was made (minus any losses due to trading or market volatility or margin debit balances) for 12 months, or TD Ameritrade may charge the account for the cost of the offer at its sole discretion. TD Ameritrade reserves the right to restrict or revoke this offer at any time. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business. Please allow 3-5 business days for any cash deposits to post to account. Taxes related to TD Ameritrade offers are your responsibility. Retail values totaling $600 or more during the calendar year will be included in your consolidated Form 1099. Please consult a legal or tax advisor for the most recent changes to the U.S. tax code and for rollover eligibility rules. (Offer Code: 220).

TD Ameritrade, Inc., member FINRA/ SIPC. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2017 TD Ameritrade.