Allotment

DEFINITION of 'Allotment'

During an IPO, this is the number of shares granted to each participating underwriting firm that they are permitted to sell. Remaining surpluses are then given to other firms which have won the bid for the right to sell the IPO.

BREAKING DOWN 'Allotment'

This is the chunk each firm gets to sell to its customers before the stock hits the exchanges.

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