Can I Buy IPO Using Robinhood App?

Yes, you can buy Initial Public Offerings (IPOs) using the Robinhood app. Robinhood provides access to IPO shares for its users, allowing them to participate in the initial public offering process. However, there are a few key points to keep in mind that will help you understand the process better.

Eligibility for IPOs on Robinhood

Not all users may be eligible to participate in every IPO. Robinhood has specific criteria based on factors such as account history or investment experience. These eligibility requirements can vary, so it is important to check Robinhood’s official resources or app for the latest details.

Reservation and Availability of IPO Shares

You typically need to express interest in an IPO ahead of its pricing. Robinhood allows you to reserve shares before they become available for trading. However, the availability of IPO shares may vary. Not all IPOs will be offered through Robinhood, and availability can be limited based on the specific IPO and brokerage policies.

Trading Post-IPO

Once the IPO is completed and the stock begins trading on the open market, you can buy and sell shares just like any other stock. This means that you can trade IPO shares just after they are listed.

Important Considerations

There are a few important considerations to keep in mind when buying into IPOs with Robinhood:

System Delays: Robinhood’s system may have delays in processing trades, especially during the initial phase of an IPO. Order Flow: Robinhood makes money by selling order flow to other market makers. This means that you might overpay if you are not careful with your order types. It is recommended to use limit orders to avoid overpaying. Limited IPO Reservation: You can only reserve shares for IPOs once they are priced and available. For the day before the IPO, traditional brokerages like Fidelity may have different criteria and eligibility requirements.

Participating in Pre-IPO Issues

If your intent is to participate in the initial offering, which typically happens the day before the stock goes public, Robinhood does not provide that option. In such cases, you will need to use traditional brokerages. Fidelity, for example, has specific conditions for participation in IPOs.

Keep in mind that I have provided Fidelity as an example and not a recommendation. Be sure to check the conditions of other brokerages to determine which one works best for you.

Future Expectations

I hope that Robinhood will start implementing such features in the future to offer more options to its users. By doing so, it can increase user satisfaction and participation in the IPO market.

I hope my answer was helpful. Have a blessed day!