Overallotment option that lets IPO underwriters sell up to 15% additional shares within 30 days of pricing. Mechanics: the underwriters initially short-sell 115% of the base offering. If the stock trades up, they exercise the greenshoe at the IPO price to cover the short (the issuer issues the extra shares). If the stock trades down, they cover by buying in the open market, creating buying pressure that stabilizes the price — making the greenshoe the primary post-IPO price-stabilization tool.