What is Allocation Notice?
An official notification from an options clearing firm to the writer of an option that the current option holder has exercised and, therefore, the writer must produce the underlying security. This may require the option’s writer to purchase or sell securities on the open market to fulfill the contractual obligation.
Allocation notice can also refer to how a broker or advisor would inform a client who has shown interest in an IPO whether his or her requested allocation of IPO shares is available in full, or if only a fraction of the requested total is available for purchase. Read more for examples and further explanation including related video clips and also comments
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