The trading that occurs after an initial public offering (IPO) is the aftermarket The trading volume on the first day that an equity is publicly offered is extremely high Flipping and aftermarket purchases can cause the volume to unexpectedly rise or drop in the days immediately following an IPO Investors must be aware of the risks involved with trading in a fast aftermarket
All of the securities exchanges are aftermarkets, where a security is purchased from another investor rather than the original issuer Also called the secondary market
Trading in the IPO subsequent to its offering is called the aftermarket Trading volume in IPOs is extremely high on the first day due to flipping and aftermarket purchases Trading volume can decline precipitously in the following days