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Strategies & Market Trends : Options-Upcoming Stock Splits
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To: Freda Kjolhede who wrote ()11/13/1996 11:56:00 AM
From: Maureen   of 415
 
Hello all,

I have a dumb question...but I'm curious. On companies with stock splits - what is the point of having a record date and pay date? I understand this with cash dividends...because if you buy or sell the stock at the "wrong time" you won't recieve the dividend. But with a stock split it doesn't seem to matter - if you buy the stock previous to the split, even if after the record date - you will recieve the split. If you sell the stock previous to the split you won't recieve it.

Mmmm... I think I know the answer - there isn't an "ex date" on these, just a record date. Is it that they set the price at which the stock will split to be the price on the record date? I didn't realize this - I thought they just split the price at the close the day previous to the split.

Is this it?

Thanks! Maureen

PS - Any statistics of when during this process is the time the prices are most likely to rise absent any other news? At the announce, the record date, the actual split date, or shortly after???
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