Flipping

What is Flipping?

Flipping refers to the practice of buying an asset with the intention of selling it quickly for a profit. In financial markets, flipping is most commonly seen in the context of Initial Public Offerings (IPOs), where investors sell allotted shares soon after listing to benefit from the price difference between the issue price and the market price.

Key Features

• Fast Exit Approach: Investors use flipping to benefit from short-lived price movements rather than extended holding periods.

• Liquidity Driven: It depends on demand and supply dynamics in the market at the time of sale.

• Volatility Factor: Profits from flipping often rely on short-term market movements, which can make outcomes unpredictable.

Why It Matters to Investors?

• Potential Gains: Successful flipping can provide quick profits, especially in IPOs where strong listing premiums exist.

• Risks Involved: If demand is weak or markets turn volatile, investors may face losses.

• Wealth Management Perspective: While flipping can generate short-term income, it is not a substitute for long-term investing strategies focused on wealth creation.