what is green shoe option


3 Answer(s)


oversubsription of an issue

Greenshoe option is a special provision in an IPO prospectus, which allows underwriters to sell investors more shares than originally planned by the issuer. This would normally be done if the demand for a security issue proves higher than expected. Legally referred to as an over-allotment option.

it allows underwriters to sell investors more shares than originally planned by the issuer