GTC Orders that are placed underneath the market and left with the specialist / DMM for execution will be reduced for the distribution of dividends. Orders that will be reduced are:
- Buy Limits
- Sell Stops
These orders are reduced because when a stock goes ex dividend its price is adjusted down. To ensure that customer orders placed below the market are only executed as a result of market activity, the order will be adjusted down by the value of the dividend.
A customer has placed an order to buy 500 XYZ at 35 GTC. XYZ closed yesterday at 36.10. XYZ goes ex dividend for 20 cents and opens the next day at 35.90. The customer’s order will now be an order to purchase 500 XYZ at 34.80 GTC.
If the customer had entered the order and specified that the order was not to be reduced for the distribution of ordinary dividends, it would have remained an order to purchase 500 shares at 35. The order in this case would have been entered as:
Buy 500 XYZ 35 GTC DNR
Orders placed above the market are not reduced for distributions.
Adjustments For Stock Splits
TradingTaking control of your portfolio means knowing what orders to use when buying or selling stocks.
InvestingWith stop-limit orders, buyers protect themselves from prices too high for their tastes.
InvestingA market order is the most common order used to purchase a financial security.
InvestingA trader places an immediate-or-cancel order to immediately execute a trade in full or in part. Any part of the order that remains unfulfilled is canceled.
TradingStop-loss and stop-limit orders can provide different types of protection for investors seeking to lock in profits or limit losses. Investors need to know how each type of order works to know ...
TradingLearn how to set each type of stop and limit when trading currencies.
TradingFind out the various ways in which a broker can fill an order, which can affect costs.
InvestingBuying and selling stock can be a lot like buying or selling a car. Traders should use and understand tools such as market orders, limit orders, day orders, and good-'til-canceled orders to ensure ...
InvestingA stop limit is an order to sell or buy a stock once it reaches a certain level, but only if the shareholder can obtain a specified price.