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Strategies & Market Trends : Tech Stock Options
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To: Debra Orlow who wrote (57562)11/16/1998 6:53:00 PM
From: Patrick Slevin  Read Replies (1) of 58727
 
Dividend date, as I recall. They may tie your funds up on ex-div, reducing available margin however. Because legally you owe it at ex-div but delivering it is not until dividend; or, if you cover the position prior to dividend date.

As for the stock, presuming you aren't talking about cash but equity dividends, then it makes no difference. It's ex-div but you don't have to deliver until it gets delivered to you down the food chain.

That is, it goes to the organization that technically "holds" electronic receipts of who has what. I can't recall the name of the place. They credit Morgan who lent it to your house so it electronically XFers to your firm who sold it to FIDO so it electronically XFers to FIDO. A transparent flow through.

You don't do anything except eventually cover. Your statements now show you are short a second issue, that's all.

Of course; the net change in dollar value is zero until one of the stocks move in price. Same way as with the cash dividend. Because everything gets adjusted whether for the cash dividend or the stock dividend.

In other words, if a $100 stock spins off a $10 company one share for every two you own then the old stock should open at 95 and the new at 10. For every 2 that you were short of the old you are now also short one of the new. Still a total of $200 for every 2 shares.
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