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Strategies & Market Trends : From the Trading Desk

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To: steve goldman who wrote (4117)	1/23/1999 11:19:00 PM
From: Gersh Avery	Read Replies (1) of 4969

Thanks for the quick response. I'm still getting acquainted with the in's and out's of the stock exchange system. Most likely there is no way now that I will get these, but I wanted to bounce it off of you anyway. I'm curious how the system works around trades that take place near the time of dividends. Say, for instance, XYZ pays a dividend of $1 per share to stockholders of record as of 1/5/99. Shareholder Smith sells his shares on 1/4/99. Jones purchases the same shares from the same broker that same day. Settlement is three days. Since the sale and purchase were predividend the stock price is $1 higher than it would be on 1/7. Now .. because of settlement is 1/8 does that mean that Smith still gets the dividend? Or does Jones because he bought the shares predividend? Or does the brokerage keep it for themselves? Which is customary for this industry? Gersh

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