Adjusted Closing Price

  

Categories: Stocks, Real Estate, Trading

On any day, you can look up a stock’s closing price and get one number. Clear as clear can be, right?

Not so fast. Closing price can be one number, but it can be affected behind the scenes by corporate stuff like rights offerings, dividends, stock splits, and other corporate actions. The closing price, if it's affected by this stuff, gets adjusted to reflect said actions.

A famous example is the one-time enormous dividend made by MSFT (Microsoft) when Bill Gates retired from the CEO role. That little action required some adjusting. Without it, the closing price of MSFT would have looked less spectacular than it really was.

BTW, adjusted closing price is important when looking at historic closing prices or when doing analysis on historic returns. If you're just an average investor, though, you probably won't even run into it.

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Finance: What is a Warrant?8 Views

00:00

Finance allah shmoop what is ah warrant Oh it's Acute

00:07

option Like kind of a stock option Light Yeah That's

00:11

How to think about it anyway Okay Okay It pretty

00:12

much feels just like a stock option And yes there

00:16

are put warrants and call warrants in the same vein

00:19

as put options and call options So then what's the

00:22

diff why don't we just call a warrant a stock

00:24

option Well warrants have you know their own little characteristics

00:27

here and they're usually issued by the company itself where

00:31

a stock options on say microsoft will They can be

00:34

issued by anyone who deals in options like goldman morgan

00:38

ups sumitomo whoever whatever investment bank that makes capital markets

00:42

trading happened they can issue options trade him have a

00:45

spread and then make profits in them and there's nothing

00:47

the company can really do about it They can all

00:49

create derivative securities on stocks or bonds of their own

00:52

volition And the company itself just kind of stands there

00:56

looking by and wondering why they didn't get into the

00:59

investment banking business Well goldman morgan and the others then

01:02

offer trading in those options on exchanges in regular form

01:07

Such that many buyers and sellers generally come together liquid

01:10

lee to trade and you know generate profit margins for

01:13

the desks of the bank's trading the securities right The

01:16

banks are basically the casino house and they end up

01:19

making most the money most of time Got that Okay

01:21

another difference warrants and options here Warming's can last five

01:25

ten twenty years that's Usually how many weeks options last

01:29

and the question remains Why would a company issue what

01:32

are essentially cheap stock options too Others to buy slices

01:36

of its own pie While the answer as with most

01:39

of these types of company deals is that the company

01:41

has to issue those warrants to get a deal done

01:44

like you know to settle a patent dispute or created

01:47

distribution or manufacturing partnership or some of their tactical arrangement

01:51

to make the good better and to make the problems

01:54

go away well warrants generally or simply held for the

01:57

duration of the partnership or of the company's existence is

02:00

an independent and city well and conversely options are traded

02:04

liquid leon exchanges all over the world and they can

02:07

be sold without a whole lot of discussion with company

02:10

Here this kind of warrant which gives you the right

02:12

to throw a piece of paper in your own financial

02:15

asset jail Very different kind of warrant than this one 00:02:18.383 --> [endTime] You stay away from the arrest warrants

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