Grey Market Premium: The Insider's Guide · Chapter 5 of 10
GMP, Subscription and Listing: The Relationship
A loose link
In general, issues with high subscription and a high GMP list better than those with weak demand, but the link is loose: there are many exceptions in both directions.
Study history
Compare an issue's last recorded GMP with its actual listing gain for past issues. LiveIPOData stores GMP snapshots and listing results so you can do exactly that, issue by issue.
Typical errors
The grey market tends to be most wrong when markets turn sharply between the end of bidding and listing day, and for very small or very large issues where quotes are sparse.
Expect error
Even strong signals miss by a wide margin. Treat any estimate as a range, for example plus or minus ten percentage points, not as a point forecast.
Key takeaways
- The link between GMP and listing gain is real but loose.
- Compare past GMP with past listing results.
- Think in ranges, not points.
- Markets turning between close and listing break the link.