What is IPO Lockup Expiration?

Trading the Insider Unlock Window

What is a lockup period?

After an IPO, insiders (founders, executives, early investors) are restricted from selling their shares for a set period — typically 90-180 days. This 'lockup period' prevents a flood of insider selling from crashing the stock immediately after the IPO. When the lockup expires, insiders can finally sell.

Why lockup expirations move stocks

When the lockup expires, the number of shares available for trading can increase by 3-10x overnight. Even if insiders don't sell immediately, the market anticipates selling pressure and often prices it in 1-2 weeks before the expiration date. Stocks typically drop 1-3% around lockup expiration, but the setup is more nuanced than 'just short it.'

How to trade lockup expirations

The contrarian play: if a stock drops 5-10% into a lockup expiration but insiders file Form 4s showing they're NOT selling, the relief bounce can be significant. Catalyst Edge cross-references lockup dates with Form 4 filings to identify these 'lockup + hold' setups. When insiders buy during their first opportunity to sell, it's one of the strongest bullish signals in the market.

Finding lockup dates

Lockup terms are disclosed in the S-1 filing (IPO prospectus). Catalyst Edge parses S-1 filings to extract lockup dates and tracks them on a rolling calendar. The scanner alerts you when lockup expirations are approaching and cross-references with insider transaction data.

Try the Free Scanner

Catalyst Edge scans 300+ SEC filings every day and publishes a ranked watchlist before market open.

Open Scanner

Frequently Asked Questions

How long is a typical IPO lockup?

Most lockups are 180 days (6 months), but they can range from 90 to 365 days. Some IPOs have staggered lockups where different insider groups can sell at different times.

Do stocks always drop at lockup expiration?

Not always. On average, stocks decline 1-3% around lockup expiration, but if insiders choose to hold (or buy more), the stock often rallies on the positive signal.

Related Topics

What is SEC Form 4? · What is Schedule 13D? · What is a Gap Up Stock? · SEC Filing Types for Traders · Pre-Market Gap Scanner · Insider Buying Signals · What is a Sympathy Play? · What is Deep Value Investing?

You looked the term up. The console shows it firing on live tickers this morning.

$99 once — the definition, then the ranked list that uses it.

Tier 1 setups touched +2% intraday 48.9% of the time across 374 tracked calls. Baseline for everything else: 40.9%. That is a +8.0 point edge, measured from the NEXT OPEN — the first price you could actually pay, not the prior close. We publish the misses too: https://catalystedgescanner.com/trust/

  1. Click Become a Founding Member below.
  2. Pay $99 once — not monthly, not ever again.
  3. You keep every future release at that price. Tomorrow's ranked list lands at 3:30 AM ET, before the open.

29 of 30 founding seats left. The price goes up when they are gone.

Become a Founding Member — $99 once

One payment. Lifetime access. The free daily picks stay free — this is for people who want the full console. Not buying today? Get tomorrow's ranked list free →