Series 99: 2.1.1.2 Adjusting Orders For Corporate Actions

2.1.1.2  Adjusting Orders for Corporate Actions

It is important to know that certain orders may need to be adjusted for certain events. The exam may call these events corporate acts. The orders that will need to be adjusted are limit orders and stop orders. These orders need to be adjusted because they are orders that are not immediately executed and may stay open on a market maker’s book.

When the company decides to pay a cash dividend, all limit and stop orders will need to be reduced by the amount o