To invest in stocks at an IPO stage you’ll need to work with a brokerage firm or an online broker that offers IPO transactions. Not all broker handles IPOs, so you’ll need to have an account with one that does. Once you have opened an account with a broker that offers IPO transactions, the next step is to determine if you are eligible to invest. Some brokers will only allow investors to participate in an IPO if they have experience in taking investment risks and if investors have a significant amount of assets with the firm or trade with them often. And even if you find the right broker to use, having access to buy the IPO might be limited.
However, if you manage to get into an IPO sale, I highly recommend that you chat with a representative of the brokerage firm if you are not familiar with the process of purchasing an IPO.
The process is, however, similar to purchasing a stock on the exchange. Just pick the number of shares you want to buy and set up your order type, and once the transaction is completed successfully the shares will be added to your account like any other security.
Whenever the stock goes on to the open market, the price may go higher or lower. Some investors may try to sell to gain a quick profit, and others may hold on to the stocks for medium to long-term gain.
Below are two popular online brokers that you can check out to invest in IPOs.