82,853
edits
Corporate actions - GMSLA Provision: Difference between revisions
Corporate actions - GMSLA Provision (view source)
Revision as of 11:35, 30 August 2018
, 30 August 2018no edit summary
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 14: | Line 14: | ||
The tension here is that the [[exercise date]] – the latest possible time for exercise – will be ''after'' the [[record date]] — the date on which you had to actually own the {{gmslaprov|Securities}}. And your ability to exercise at all is dependent on having held the {{gmslaprov|Securities}} on the [[record date]]. | The tension here is that the [[exercise date]] – the latest possible time for exercise – will be ''after'' the [[record date]] — the date on which you had to actually own the {{gmslaprov|Securities}}. And your ability to exercise at all is dependent on having held the {{gmslaprov|Securities}} on the [[record date]]. | ||
===The case against=== | ====The case against==== | ||
If the {{gmslaprov|Lender}} gives notice ''after'' the record date but ''before'' the exercise date, is that a reasonable time? I think you could construct a fairly good argument that it is not, at least if the {{gmslaprov|Borrower}} happens to be short the stock: | If the {{gmslaprov|Lender}} gives notice ''after'' the record date but ''before'' the exercise date, is that a reasonable time? I think you could construct a fairly good argument that it is not, at least if the {{gmslaprov|Borrower}} happens to be short the stock: | ||
*The {{gmsla}} is a [[title transfer]] document designed for [[short selling]]. | *The {{gmsla}} is a [[title transfer]] document designed for [[short selling]]. | ||
| Line 29: | Line 29: | ||
**Why exercise the notice before the exercise time? | **Why exercise the notice before the exercise time? | ||
**It wouldn’t make any difference from the {{gmslaprov|Borrower}}’s perspective. | **It wouldn’t make any difference from the {{gmslaprov|Borrower}}’s perspective. | ||
===The case for=== | ====The case for==== | ||
Pal, it’s my stock, you borrowed it, you take the risk of all economic performance in the mean time. Your safest way of doing that it by holding it. If you can hold it, you can put in your notice and exercise, no problem. | Pal, it’s my stock, ''you'' borrowed it, you take the risk of all economic performance in the mean time. Your safest way of doing that it by holding it. If you can hold it, you can put in your notice and exercise, no problem. | ||
What do you mean you shorted the security? Who knew? More to the point, who cares? By | What do you mean ''you shorted the security''? Who knew? More to the point, who cares? By doing so you took a view on it: this risk is express something you bet against happening. | ||