Definition: An underwriter's right to issue more than the stated number of shares of an issue. Named after the Green Shoe Company, which was the first issuer to grant an underwriter such an option. Application: For example, if Underwriter offers 1, 000, 000 of ABC's shares at $10 and investors oversubscribe the issue, Underwriter can require ABC to issue another 100, 000 shares at $10. Comment: It's good for Underwriter. It's good for the investors in the 100, 000 shares. Not so great for the other shareholders, but two out of three ain't bad!
Barry Goldsmith
| APA | Barry Goldsmith. (2010). Green Shoe option. Retrieved September 28, 2026, from http://smartdefine.org/green_shoe_option/definitions/1155119 |
| Chicago | Barry Goldsmith. 2010. "Green Shoe option" http://smartdefine.org/green_shoe_option/definitions/1155119 (accessed September 28, 2026). |
| Harvard | Barry Goldsmith 2010, Green Shoe option, Smart Define, viewed 28 September, 2026, <http://smartdefine.org/green_shoe_option/definitions/1155119>. |
| MLA | Barry Goldsmith. "Green Shoe option" 21 October 2010. Web. 28 September 2026. <http://smartdefine.org/green_shoe_option/definitions/1155119> |