In a bid to provide the equity market with more transparency into the initial public offering process, exchange operator Nasdaq now is providing traders a tool that helps them see into the order book.
Nasdaq has announced the launch of its IPO Indicator application, a web-based application and data tool that shows both traders and underwriters involved in an IPO auction the total number of shares that will execute from orders sent.
According to Nasdaq, users will be able to choose any IPO during a given trading day and see their data in real time. Filtering options are also integrated into the order depth table giving users more custom and consolidated snapshots of their orders and potential executions.
However, IPO Indicator doesn’t provide a complete view of the full pre-IPO opening book, but provides theNet Order Imbalance Indicator (NOII)data for the entire book, along with the firm’s specific order information and execution potential as the IPO book develops.
These share values are based on the current indicative price of the NOII at the current time. The Indicative Price is part of the NOII, a service in which Nasdaq provides detailed and continuous information regarding the imbalances, indicative and likely clearing prices.
Underwriters can use this web-based tool to view order price levels they have entered and their potential opportunity to fill each order as a share count and percentage level.
IPO Indicator is available free of charge via the Nasdaq Workstation.
