How to Use the IPO Allocation Profit Estimator
Unlike some markets where retail investors subscribe through a formula-based equal or prorated allocation system, the US has no such public mechanism. Retail access to IPOs is limited to a handful of broker IPO access programs, and the number of shares you actually receive is decided at the broker's discretion rather than guaranteed by a published competition ratio.
This calculator reflects that difference by asking for your own estimate of the broker's expected fill rate instead of a competition ratio. It multiplies your requested shares by that fill rate to estimate your allocation, then computes gross profit from the IPO price and your expected post-listing sale price, and subtracts short-term capital gains tax (since IPO flips are typically sold within a year and taxed at your ordinary federal rate) to show an after-tax net profit estimate.
Because the fill rate is your own estimate rather than a guaranteed formula, actual results can vary significantly between brokers and deals — hot IPOs with high demand often fill only a small fraction of requested shares. Use a conservative fill rate and sale price, and treat the output as a planning estimate rather than a promised return.
Frequently Asked Questions
No. Unlike a public subscription system with formula-based equal or prorated allocation, US retail investors get IPO access only through a limited number of broker IPO access programs, and how many shares you actually receive is at the broker's discretion, not guaranteed by a public formula.
Since there's no public competition-ratio formula in the US, this calculator uses your own estimate of what share of your requested shares the broker is likely to actually fill, based on your broker's past IPO access track record for similar deals.
If you sell within a year of the IPO, the profit is taxed as short-term capital gains at your ordinary federal income tax rate. There is no separate securities transaction tax in the US, unlike in some other markets.