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Can I Buy IPO Stocks on Robinhood in 2021?


Does Robinhood offer IPO stocks on its brokerage account? Robinhood IPO access requirements and how to buy.



IPO Trading at Robinhood


When trading stocks, a common challenge that many investors face is knowing how to select the best entry point.

Trading IPOs makes that question a little bit simpler. IPOs are priced at levels that investors agree on before the stock is released. Valuation is generally decided by real world factors, instead of the ebb and flow of the market, and the stock price has not yet been subject to the psychological actors that drive price in the markets.

In short, many investors choose to get into IPOs because the ‘good deals’ that they offer. If you want to learn more about how to get involved in IPO trading at Robinhood, we have the information you need right here.


IPOs on Robinhood


To get started with IPOs on Robinhood, traders should locate the IPO Access list, and follow it. Following the list ensures that alerts can be sent when hot new companies get in line to debut their stock offering. Followed lists also appear near the Lists (watchlists) for easy access.

IPO Access includes all the IPOs that you can potentially invest in on the Robinhood platform.

IPOs are organized into two categories: “In flight,” and “Launched.” The In flight category includes current IPOs that have yet to go public. The IPOs listed in the In flight list are available for bidding while those in the Launched list are past IPOs that are now being traded on the stock market.

Investors will find a regularly updated list of IPO options in the ‘In flight’ list to choose from.


Robinhood Buy IPO


Buying IPOs on Robinhood


To bid on an IPO on Robinhood, select one of the company names in the “In flight” list.

Clicking on the name brings you to the IPO page for that company. Information related to the company outlook (also known as the prospectus), current bid price range, date of IPO release, and IPO timeline are all available and clearly displayed on the same page.


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Placing a Bid


To get started, select the number of shares you would like to bid on. Enter the desired amount in the space provided. Then, place a bid on the IPO in the available price field. You can put any amount that you feel comfortable with, but keep in mind that bidding within range gives you a better chance of winning the bid.

There are never any guarantees that a bid on an IPO will be filled, but by following the suggested pricing, investors can increase their chances.

One thing to note when placing a bid is that Robinhood will use the default bid amount for each IPO. The price used is usually within 20% of the price range that is set during the price discovery stage. When investors prefer to use a specific dollar amount for their bid that is different from the max share price, a limit price can be placed as well.


Robinhood Invest in IPO stocks


Robinhood IPO Availability


When it comes to IPO availability, traders at Robinhood will likely notice that there aren’t that many IPOs to choose from. Of all the IPOs that go public daily, Robinhood only lists ones that are underwritten by its partner banks.

For many, that may not be a deal-breaker, but for anyone looking for a greater selection of IPOs, there are some better brokers available. One such option is Webull (read about IPOs on Webull).


Robinhood Invest in IPO stocks


IPO Flipping


Another important thing to note about IPO trading on Robinhood is the broker’s policy on flipping. Flipping is the act of selling IPOs within 30 days of receiving the stock. As large price swings are common for IPOs within the initial days of being listed, many investors look to take profits when they are available.

Both the issuing companies themselves, and Robinhood, discourage flipping. Investors who flip IPOs on the platform are warned before hitting the sell button.

The resulting action can include exclusion from IPO Access for up to 60 days, as well as a lower probability of shares being awarded.


Robinhood Invest in IPO stocks


Open Robinhood Account


Get one FREE stock when you open an account.

Open Robinhood Account


Pros and Cons of IPO Trading at Robinhood


Trading IPOs on Robinhood can be quite easy to do and there are a few benefits that investors will enjoy. However, there are also a few limitations that some may not be so thrilled about.

Pros

- IPOs can be requested from mobile and web platforms
- Clear pricing for new issues
- IPO bidding process is simple and convenient

Cons

- Flipping strongly discouraged
- Limited number of available IPOs
- Lack of advanced charting tools makes tracking IPO success difficult after release


Better Alternative For IPOs


A popular broker called Webull offers better selection of IPOs, the best pricing ($0 commission), free stocks to get started, great trading tools, community of 11 million members, and much more (read Webull review or read about IPOs on Webull).


Open Webull Account


Get 2 FREE stocks valued up to $1,850.

Open WeBull Account