When a stock is not listed how the broker does executes order for preferred customers as for grey market?


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Grey market is not an official market so it's not regulated by any government authority. It's an over the counter market where IPO application traded before the listing day. All the transaction are done in cash only on a personal basis. In Grey market dealers may execute orders for preferred customers as well as provide support for a new issue before it is actually issued.


4. Ulka  Jan 24, 2011 16:24 I Like It. | Report Abuse Reply
The process of buying or selling shares in the grey market is not monitored by stock exchange.The contract is entered into before the date of listing.There are two possible ways by which contract can be executed:The shares are sold to the client by the broker on the date of listing thereby adjusting profit or loss.Though there exist the another way too which is of transferring shares from one account to another, but due to several glitches, it is not considered
3. SER  Dec 16, 2010 16:07 I Like It. | Report Abuse Reply
2. paresh  Nov 3, 2010 16:05 I Like It. | Report Abuse Reply
if the stock are not listed on the stock exchange then broker will pay the fix amt n wait for listing or transfer the stock to his account & pay the entire money to his pre. clients...............all comes to the cost for broker for getting minor difference................
Riskly but fair play.............
1. Anshul  Aug 22, 2009 12:17 I Like It. | Report Abuse Reply
There is no orders executed by brokers, actually what happens for example u apply 1000 shares of a "X" company at cap price at Rs.60, now what the buyer of grey market will do, he will make a oral contract with you that what ever the quantity you will get through IPO I will purchase it at Rs.75(60+15)from you, this Rs. 15 will be the premium of that stock in grey market, and finally after the allotment of the shares, according to oral you will transfer the share offline to the buyer's account and he will give you the cash i.e (number of quantity you have got*75)