Series 7: 12.5.1. Over-Allotted Issues: Greenshoe Option

12.5.1. Over-Allotted Issues: Greenshoe Option

When demand for shares is high, an underwriter may sell more shares than will be issued at the public offering. This practice is known as over-allotment and is a way for the underwriter both to have some control over the price of the security in the after-market (after the primary offering has taken place) and to make ad