Over-allotment option
From ACT Wiki
Securities issuance - price stabilisation.
An over-allotment option is an option granted by an offeror of securities in favour of the underwriters, investment firms or credit institutions involved in the offer for the purpose of covering overallotments.
Under the terms of the option, the underwriters - and sometimes others - may purchase up to a certain amount of relevant securities at the original offer price for a certain period of time after the offer of the relevant securities.
Also known as a Greenshoe option, after the Green Shoe company which first used this type of option in 1917-18.
