Another way of saying “buying, and then selling”. Flipping involves buying shares, usually in an initial public offering (IPO), and selling them immediately for a profit. More specifically, it involves liquidation of an IPO in the first 2-3 days of trading. Flipping is said to be a phenomenon in the immediate aftermarket. Underwriters of new stock issues (e.g. brokerage firms) usually discourage flipping, and are watchful to allocate shares to committed investors- i.e., those who plan to hold on to the shares for some time. However, many investors cannot resist the temptation to flip a new issue once its price has made significant increases. Issues which rise in price sharply are known as hot issues.
An investor who flips stocks or positions is referred to as a flipper.
