LADDERING

A bond investment strategy whereas it promotes outsized pre-IPO prices for the sake of acquiring greater allotment. The investor staggers the maturity of the bonds in his/her investment portfolio, then the proceeds may be reinvested at periodic intervals. Once it reaches a certain levels, "insiders" will sell their shares and take their profits.

It is an illegal IPO practice that the underwriter takes part in the sale of IPO shares to clients with an agreement that more shares will be purchased post-IPO, and leads to huge gains for both parties.