Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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.

Strategies & Market Trends : Picks of the quarter -- Ignore unavailable to you. Want to Upgrade?

To: Sr K who wrote (2466)	1/21/2007 10:28:47 AM
From: Patrick Slevin	Respond to of 20435

I'd be guessing. My presumption is that ML takes in the spinoff at the price set forth due to the spinoff. The cost basis of GE (for example) is adjusted as well. Because I haven't had a spinoff since opening the ML account I do not know. A review of statements would tell me what happened (upon occurrence) and how it was adjusted. I'm less certain it would be handled accurately in online trading accounts. Certainly splits would be handled in the usual fashion, but I cannot speak to spinoffs with respect to online accounts. In my case, online accounts are used primarily for swing trades and so it may never happen anyway. Even if it were to happen, because they are swing trades the "event" would happen during the course of the trading year. As opposed to an event that may have occurred many years ago and be more difficult to determine. In the ML account I've migrated the bulk of the assets to managed accounts. As for the rest the monies are tied up in long term position trades; the number of separate positions are few, and so any diversion away from the norm will be easily spotted. The managed money is managed as a series of Low Risk accounts; as a result most are tied up in instruments designed for yield. Therefore spinoffs "should" not be an issue. The design is dictated by me to ensure that if my trading completely blows up there is a backup account.