Conditional dealing

Conditional dealing is a short window during a UK IPO when shares can be traded on the stock exchange before they’ve been officially admitted.

Here’s the order of events. Once the IPO price is set, the shares can start trading on a conditional basis, usually for a few days. Every trade in that window depends on the shares achieving formal admission to the exchange.

• If admission goes ahead, the trades are confirmed and settle as normal
• If admission doesn’t happen, the trades are cancelled

For most retail investors, the IPO really starts when conditional dealing ends. That’s when unconditional dealing begins, the shares are formally admitted, and investing apps and brokers can usually offer them to buy and sell.

In the US, a similar idea exists called ‘when-issued’ trading.

Related terms: Formal admission, IPO, Bookbuilding