Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 332.70

+0.7%

1:26 PM EST

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To: Raptech who wrote (7925)	9/12/1997 3:06:00 PM
From: Tech Buyer	of 70976

Some possible minor effects of a split on small investors: * It might cost slightly more in commission to buy or sell the same dollar amount of stock because of the higher number of shares, unless the brokerage has flat-fee trading. * There are more shares to write covered call options on. I tend to think that this would mean slightly higher total amount of premium, even though the cost per contract is lower than before (e.g., the new cost per contract is slightly more than half of the cost of the old contract in a 2 for 1 split.) The time premium could be slightly higher on a percentage basis, due to higher volatility. I don't have any actual experience with this however. TB

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