Hot Issue
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Definition of 'Hot Issue'An issue that sells at a premium over the public offering price on the first day of trading. A hot issue is most often association with an initial public offering (IPO), in which the stock of the newly offered company is in great demand, causing the initial trading price to surge above the IPO price.Also referred to as a hot IPO. |
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Investopedia explains 'Hot Issue'Over the course of history, many newly issued stocks have become hot issues, only to drop down shortly after, often falling far below their IPO price. For example, during the late 1990s, many Internet stocks shot up dramatically in price upon their initial offering, only to crash and burn months later during the tech crash of 2000.Hot issues can also refer to other types of asset classes as well, such as fixed income and ETF issues. |
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