It stands for initial public offering grey market premium; the per-share premium an initial public offering (IPO) commands in the grey market before the listing of the securities on an exchange/ venue. In a grey market IPO, the grey market premium is the price that the security is, or is expected to be, trading at before the actual public offering.

Grey market premium reflects that how a particular issuer’s IPO issue may react, or may be received by the investor community, on the listing date. A positive premium signifies that an IPO is expected to list at a premium (issuance profit/ a premium price) while a negative premium reflects an IPO listing at a discounted price (issuance discount).