The Greenshoe Option: The Bank That Shorts the Stock It Just Sold
For up to 30 days after a company goes public, the underwriter that sold its stock to the world can be secretly short it — selling more shares than the company actually issued, then deciding after the fact whether to cover that short by buying in the open market or by exercising an option to buy fresh shares from the company itself.
For up to 30 days after a company goes public, the underwriter that sold its stock to the world can be secretly short it — selling more shares than the company actually issued, then deciding after the fact whether to cover that short by buying in the open market or by exercising an option to buy fresh shares from the company itself. What the greenshoe option actually is, why it's named after a shoe company, and why India's IPO market needed it most in exactly the years global markets needed it least — with paired Indian and international examples throughout.
Surya · 7 min read