IPO University

This is the amount of stock in an initial public offering (IPO) granted by the underwriter to an investor. For most IPOs, the allocation is significantly less than the indication of interest. Investor allocations are often meted out based on commission volume, trading history and type of investor. IPO allocations are normally communicated to investors the morning after the pricing. Large investors typically receive almost all of the allocations of an IPO, and individuals must participate in aftermarket trading.