pre-IPO shares

What Is Grey Market? Is There Anything Like Bull And Bear Situation In Unlisted Share Prices?

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Retail investors often get fascinated by the idea of trading as it gives them the opportunity to invest money and yield high ROI in the future. If you’re ever interested in trading and staying informedtuned with stock market news, you might have surely come across the term “Grey Market.” The Stock Exchange Of India (SEBI), or regular stock exchange, is something everyone is familiar with; one question that trotters in people’s minds is, “what is the grey market?” and how much do they earn and lose profit during the bull and bear situation in the grey market. If you’re a beginner investor, understanding the grey market and situations like “bull and bear” is important to you. Stride along with us, as we will start from scratch. 

Grey Market – An Overview  

Unlike SEBI, the grey market is where unofficial trading of pre-IPO shares occurs before their official launch. Though the grey market is unofficial, this market has been treading for a long time, and investors use it on a large scale to get a high return on their investment. Also known as the parallel market, investors in this market trade for shares before they are launched for trading in the official market. 

Bull And Bear Situation In Unlisted Share Market

People in the stock market often hear “the market is bullish” or “the bears have taken over the market.” What does this situation exactly say about the market? Bull and bear are used to indicate the situation of any type of market, not just the stock market. Let’s confabulate it below. 

Bull Market Situation 

A bull market indicates the market’s financial condition when the shares’ prices increase due to the positive performance of the company, the launch of innovative products, growth in business operations, etc. It gives investors confidence that the share prices will rise and give investors a reason to buy more shares. So, the investors who are optimistic about buying more shares are regarded as “bulls.”

Possible Effects Of Bull Situation On Unlisted Share Prices

Now that you’re aware of this situation, let’s look at the possible effects of bull situations on unlisted share prices. 

  • In this situation, there is positivity about the company, its performance, and growth, which leads to an increase in its share price. For example, boAt’s unlisted shares price surged lately with its launch of Smart Ring. 
  • A bullish sentiment about the company attracts more investors from existing shareholders to its pre-IPO stocks.   
  • This situation is quite appealing for investors as they can earn high returns in the future based on the positive performance of the company.  

Bear Market Situation

Opposite of a bull market, the price of pre-IPO stocks falls or is expected to fall in the near future, and sellers outnumber the buyers in the market, which also indicates the unhealthy performance of the company. When investors feel pessimistic about the share price, they sell their shares, called “bear.” 

Possible Effects Of Bear Situation On Unlisted Share Prices

Here are the effects of the bear situation on unlisted share prices. Check them below:

  • The bear situation leads to pessimism among investors, which results in a decrease in the demand for unlisted shares, which causes a decrease in the price. 
  • A long bear market situation can increase the risk of financial distress for a company as well as its existing and new investors. This lowers the value of the unlisted share of a particular company. 
  • The financial distress in the company also makes it difficult for any company to raise funds. 

Why Trading In Grey Market Is So Hype?

Trading in the grey market has been in demand for many years. Traders and investors who believe that stock has the potential to yield high-return trade in the grey market. The grey market is an excellent money-making opportunity for everyone who wants a high ROI on their investment and can buy pre-IPO stocks at a discounted price. Grey market prices work on the basic principle of demand and supply, including:

  • The higher the demand, the higher the prices
  • Higher the supply, lower the prices 

High returns could be one of the reasons for people to invest in the grey market; another reason is that the grey market offers investors an opportunity to exit the IPO before their listing. 

Buy Unlisted Shares Of Top Pre-IPO Companies With Stockify

Are you planning to invest in pre-IPO stocks of top unlisted companies in India? If yes, Stockify, one of the leading platforms in India, is here to help. You can buy unlisted shares of pre-IPO companies ranging from different sectors such as retail, healthcare, technology, energy, finance, etc. The expert brokers at Stockify will help you throughout the trading process and provide you with the necessary information about the company. From EPS growth to EBITDA and financial reports, you will get every necessary information. Speak to brokers now and start trading. 

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