Adjustment of Orders for Stock Splits and Dividends

What this video covers

• How the rule defines an open order as an order to buy or an open stop order to sell, and why open stop orders to buy and open sell orders are excluded
• Why the adjustment trigger is the ex-dividend, ex-rights, ex-distribution, or ex-interest day, not the record date or payable date
• How the under-one-cent exception applies only to cash dividends and cash distributions, not small stock distributions
• How cash dividends reduce the order price, unless marked "Do Not Reduce," and round the resulting price down to the next lower minimum quotation variation (MQV)
• How stock dividends and splits round distribution value up, subtract it from the price, and increase share size using the ratio, unless marked "Do Not Increase"
• Why "Do Not Reduce" and "Do Not Increase" perform separate jobs, and why a stock split price adjustment still occurs regardless of the order marking
• How to handle combined cash and stock distributions, stockholder options, indeterminate values, reverse splits, excluded orders, and customer notification duties