Журнал бизнеса и экономики

IPO Trading with Short-term & Intraday Temporal Functionalities

Abstract

Vasiliki A Basdekidou

Trading is a temporal (i.e. time-based) historical living system with a number of functions, like: Initial Public Offerings (IPO), Seasoned Equity Offerings (SEO), stock (instrument) price action Gaps, Breakouts, etc. In this domain, a number of warning dynamics timing functionalities is available, like: On Open Gup-Ups (ooGUp), On Open Gup-Downs (ooGDn), Morning Breakouts (mB), etc. All these time-based functionalities are regarded as 2nd level functions (i.e. functions of functions; because of the timing involved) with great trading opportunities, and they are defined–for the first time in the corporate finance literature- by this paper as Temporal (timing) Trading Functionalities (TTF). In particular, the IPOs with the embedded TTF functionalities are great trading opportunities for the institutions, the individual (noncommercial) market investors, the swing traders, and the speculators. Data analysis shows that during the seasoned equity offerings time, shareowners significantly increase their share share-holding, including offerings that would be classified as overpriced at that time; hence, the involved trading volatility is increased resulting in great trading and profit opportunities. This paper contributes to corporate finance literature by examining the IPOs functions and define and document their inherit TTF functionalities. For this purpose, four categories of shareholders are regarded: The longterm institution and non-commercial traders (investors), the swing momentary institution traders (institutions), the shortterm non-commercial traders (speculators) and the intraday non-commercial traders (speculators). Paper concludes that, in IPO/TTF trading, the swing traders(institutions), incorporating in their trading strategies the short-term TTF functionalities, are benefit at the expense of momentary and intraday speculators, while the long-term investors are not affected by the IPO offerings.