A greenshoe option, also known as an over-allotment option, is a provision that allows underwriters to sell additional shares in an initial public offering (IPO) of securities that is already issued by a company, above and beyond the number of shares included in the original offering. This option helps stabilize the stock price in the secondary market by providing an additional supply of shares to meet the demand of investors. The greenshoe option is granted by the issuer to the underwriters and is typically exercised within 30 days of the IPO.