
Grey Market
The grey market is an unofficial, marketplace where unlisted or soon-to-be-listed securities are bought and sold. It operates outside of formal exchanges and lacks the regulatory oversight and structure of official stock markets. The grey market allows investors to trade shares before they are officially listed. Underwriters of an IPO often analyze the grey market premium (the price difference between the expected listing price and the grey market price) to gauge investor demand for a stock before it becomes publicly available.
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