Insights

Lock-Up Expirations as a Supply Event

Alphanume Team · March 18, 2026

Dated insider unlocks as a tradeable signal.

Lock-up expirations are among the cleanest scheduled supply events in the US equity market. The dates are known in advance from the offering documentation. The locked-up share counts are disclosed. The holder categories are identifiable. The mechanical effect — newly tradeable shares entering the float — is uniform across cases. For systematic short-side positioning, lock-up expirations meet every criterion of an event-driven trade: dated, sized, sourced from disclosures, and recurring across the population.

What unlocks at lock-up expiration

A typical IPO lock-up covers directors, officers, and significant pre-IPO holders for 180 days from the prospectus date. A typical de-SPAC lock-up covers sponsors for 12 months (or earlier on price triggers) and target insiders for 6-12 months. PIPE lock-ups, if any, are often shorter (30-90 days).

At expiration, the contractual restriction lapses. Previously restricted holders gain the option — not the requirement — to sell. The effective float of the security expands by the share count of newly eligible shares.

Why this produces supply pressure

Three reasons:

1. Holder behavior is asymmetric. The locked-up shareholders are not a random sample. They are typically holders with low cost basis (founders, sponsors, early investors) or holders with monetization incentives (event-driven funds in PIPE structures). The marginal seller among the newly unlocked is more likely to sell than the marginal long-term holder.

2. Supply concentration. Lock-ups typically cover share counts that are large multiples of pre-expiration float. In the IPO context, the 180-day lock-up may cover 5-10x the public float. In the de-SPAC context, multiples can be even higher.

3. Front-running pressure. The dated nature of the event invites front-running. Short sellers and hedgers position before the expiration date in anticipation of unlock supply, contributing to weakness in the days and weeks before.

The empirical pattern

Studies of lock-up expirations consistently document negative abnormal returns in the windows around the expiration date. The magnitude varies:

IPO lock-ups: Modest but reliable abnormal returns of -1% to -3% in the (-5, +5) window.
De-SPAC lock-ups: Larger effect — -3% to -10% in similar windows, particularly for sponsor lock-up expirations.
PIPE lock-ups: Effect varies with PIPE investor mix; event-driven-fund-heavy PIPEs show steeper effects.

The drift extends 30-60 days beyond the expiration date as distribution continues over time.

Quantifying the supply event

For a given expiration, the relevant calculations:

Metric	Calculation
Unlock share count	From lock-up agreement
Unlock as % of float	Unlock count / pre-expiration float
Days-of-volume	Unlock count / average daily volume
Holder concentration	Top-N unlocking holders as % of total

See quantifying lock-up overhang.

Trading the event

Common positioning patterns:

Pre-expiration short. Enter 10-30 days before scheduled expiration; hold through expiration plus 30-60 days. Captures both pre-event front-running and post-event distribution.
Expiration-day entry. Enter on the day of expiration; hold 30-60 days. Lower pre-event drift exposure but more focused on distribution-related drift.
Cohort positioning. Maintain ongoing exposure to the cohort of names with upcoming expirations in a defined window.

The data infrastructure

The required inputs:

Lock-up calendar across the de-SPAC and recent-IPO universe.
Locked-up share counts by holder category.
Early-release trigger terms (sponsor lock-ups frequently have price-based early releases).
Float as of expiration date.

See how to build a lock-up expiration calendar and how to track lock-up expirations from S-1 filings.