stock options?

Question

ok so i started working for starbucks coorporation, and they offered me stock options, now im going to get them, and get as much as i can, but they were telling me that the stocks often split, and your money doubles when this happens, can anyone who knows about stock tell me how it works?

Answer 1

when stocks split, your money does not double. it is the amount of shares you hold that doubles i.e. if you had 100 shares trading at $100, you now have 200 shares trading at $50. if you calculate what you have before and after the split, you still have $10,000. stock splitting allows the stock to maintain a lower price and maintain investors' interest in the stock. more people will be willing to purchase the stock at $50 then at $100. this also has the added effect of increasing amount of volume of the company stock. people like investing in company stocks that have high volume because they know that if they ever need to sell the stock, there will be buyers. you never want to be stuck with a stock you dont like because the market has no buyers.

Answer 2

A split happens when a corp wants to increase the volume of outstanding shares. Lets say your stock reaches a value of $80 per share and the higher price has decreased the rate at which stocks are traded. They will "split" the stock, meaning every share that is worth $80 is now two shares, each worth $40. You now have more stock that can be traded.

Answer 3

Listen to "Pete" he is basically right, you will have twice as many shares at 1/2 the original value at the split.
But usually the split shares go up in value (not double) because they are cheaper for a lot of little investors to buy, so it puts upward pressure on the stock.