SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : JDS Uniphase (JDSU)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Nichols who wrote (1053)9/23/1999 9:17:00 AM
From: Stocker  Read Replies (1) of 24042
 
Using your example - if a person has $5,000 to invest if the stock trade at $100, he can only get 50 shares. Now that it split and it trades at $50, he can get 100 shares!! Twice as many shares.

If a person wants to use a covered call option strategy (ie-write a call against their long position in the stock) now it would be easier to do once the stock splits. You need to have at least 100 shares to write an option. If you had fewer shares, you couldn't do it. It also can make options trading cheaper because you can now trade more contracts.

For small companies, splitting the stock makes the float larger and can greatly enhance the liquidity of the stock.

Also, it does become easier for small investors in terms of placing limit orders etc. In Canada, or in the US if trading is illiquid, placing a limit order for 50 shares usually means your order will sit around forever. Board lot orders usually have all the priority.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News