American retail investors face bans for selling IPO stocks too early
Major trading platforms can permanently block users who sell new shares within thirty days, a restriction that rarely applies to large institutional hedge funds.
When a high profile company goes public in the United States, individual investors often face strict penalties for a practice known as flipping. While institutional giants like BlackRock or Citadel can often sell their shares immediately to capture quick profits, retail traders using platforms such as Fidelity or Robinhood are frequently required to hold their positions for 15 to 30 days. This creates a lopsided market where small investors provide price stability while larger players exit their positions.
Continue Reading in App
2 more paragraphs · plus a 3-question quiz