Whenever an IPO is issued, whilst many people tend to see it to be a great opportunity to invest, others ignore it, perhaps because they really do not know what it is all about. So, what really is an IPO? Well, IPO is an acronym for Initial Public Offering' and it refers to the initial sale of a company's stock to the public. The process of how to buy stock at IPO is quite different to the many other purchases that we usually make, and it is one of the reasons many people opt not to participate in this investment that could turn out to be quite profitable.

The first thing that you would need to do is to have a trading account. The trading account is usually required for you to purchase any kind of stock, and when it comes to the IPO, careful attention would need to be paid to the firm of brokerage that you choose to sign up with. Ensure that as you sign up for this trading account, ask lots of questions about the IPOs and how the firm would help you to be able to get the best out of your trading experience. You can , make sure you check with them about a particular upcoming IPO you are interested in. They have an excellent customer service reputation and trades are very reasonable at $4.95.

It is common for people to rush into IPOs just because everyone else is doing it, but it would be quite important to do research on individual IPOs before you invest in them. The internet is a great resource that you could turn to, as there are lots of websites available that offer information on various upcoming IPOs. This would allow you to be able to plan well, for instance, setting aside funds that you might want to use in the IPO. The information you get would also help in determining whether it would really be the right decision to invest in a given IPO.

The next thing that you would need to do is to get in touch with the 'right' people. This is with regard to connections, because when it comes to IPOs, people rarely get the number of stock that they applied for due to the great number of applicants. Brokers are known to sell the IPOs to those that they consider to be top clients, and hence, getting in touch with the underwriters, would be a good way to ensure that you do indeed get a favorable percentage of the stock. For a high profile IPO like Facebook, it is almost impossible for an average investor to get the stock at IPO.

The last thing that you would be left to do is just simply buy the stock, and this should be preferably done after following the above steps. Before you do this, there are given criteria that you would have to meet before you are allowed to buy the stock. This might at times vary from one brokerage firm to another, so ensure that you do get to be eligible to buy stock well in advance of the deadline for the purchase of the shares. Once you are in possession of the shares, continue to look for information that would help you be wiser as you aim to make this venture be profitable.

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