Split Date Contract For Free

A 1-for-10 split means that for every 10 shares you own, you get one share. Below, we illustrate exactly what effect a split has on the number of shares, share price, and the market cap of the company doing the split.

What Does a 4-for-1 Stock Split Mean? Just as a stock split cuts a company's shares in half, a 4-for-1 stock split divides each share into quarters. In this case, the post-split company will have four times as many outstanding shares, each worth a quarter of the original, as will the company's investors.

A company announcing a split usually sets an effective date of 10?30 days after the announcement. All shareholders who own the stock the trading day before the ex-date will take part in the split. The shares might take another few days to settle. Ask your broker if you have questions about how they handle splits.

A 3 for 1 stock split results in 3 times the number of shares at 1/3 the price. The holder of an option contract will have 3 times as many contracts at 1/3 the strike price. A 4 for 3 stock split results in 1.33 times the number of shares.

Does it matter to buy before or after a stock split? If you buy a stock before it splits, you'll pay more per share than what it'll cost after it splits. If you're looking to buy into a stock at a cheaper price, you may want to wait until after the stock split.

For instance, if Investor A holds 200 shares of a company and a company declares bonus, that is for every one share, he gets 4 shares for free. That is total 800 shares for free and his total holding will increase to 1000 shares.

An option contract for a reverse split is typically adjusted as follows: Strike Price - No change. Number of Contracts - No change. Premium multiplier remains 100.