Who gets the periodic payments when an equity is sold on an repurchase agreement?
"The Wikipedia page for Repurchase Agreement has two relevant pointers on this topic:  The legal title for any securities used in a repo actually pass from seller to buyer during the term of the agreement. In basic terms this means that if one sells a bond on repo with a promise to buy it back, then the ownership actually transfers to the buyer for that period of time.  If a coupon is paid during this time period, it can either go to the buyer or the seller. Usually, the coupon payment goes to the initial owner of the security pre-repo (our ""seller""). But sometimes the repurchase agreement will specify otherwise. So, again in basic terms, usually the repo seller/initial security owner receives any payments made during the term of the repurchase agreement. (Both points are in the first paragraph of the section ""Structure and Terminology"".)" "Repurchase agreements are a way of financing a security position. You have a collateralized loan where you give your security in exchange for cash. Let's say you have a 10 year Treasury note paying 3.5% while the 1-week repurchase rate is 0.5%. You loan the security to someone with a promise to repurchase it from them some time in the future. You  collect the 3.5% coupon and you pay the 0.5% interest. Clearly it makes no sense for someone to collect interest on money and also collect coupon payments. And for the counter-party it makes no sense to be not getting coupon payments and also to be paying interest. This how one website explains the process: During the transaction, any coupon payments that come due belong to   the legal owner, the ""borrower."" However, when this happens, a cash   amount equal to the coupon is paid to the original owner, this is   called ""manufactured payment."" In order to avoid the tax payment on   the coupon, some institutions will repo the security to a tax exempt   entity and receive the manufactured payment and avoid the tax (""coupon   washing"") I find this unequivocal description to be the clearest During the life of the transaction the market risk and the credit risk   of the collateral remain with the seller. (Because he has agreed to   repurchase the asset for an agreed sum of money at maturity). Provided   the trade is correctly documented if the collateral has a coupon   payment during the life of the repo the buyer is obliged to pay this   to the seller."
You could think of points 1 and 3 combined to be similar to buying shares and selling calls on a part of those shares. $50k is the net of the shares and calls sale (ie without point 3, the investor would pay more for the same stake). Look up convertible debt, and why it's used. It's basically used so that both parties get 'the best of both world's' from equity and debt financing.   Who is he selling his share to in point 2 back to the business or to outside investors? The NY company's board of directors are your agents and fiduciaries.  I'll call them your agents below.  The acquiring company entered into some contract that your agents negotiated.  Whatever the acquiring company owes you in terms of money, equity, or specific communication is based on what your agents dealt for in the sale contract.   Best ask your agents what they got for you. Regardless of whether a stock is owned by a retail investor or an institutional investor, it is subject to the same rules.  For example, say that as part of the buyout, 1 share of Company B is equivalent to 0.75 shares of Company A and any fractional shares will be paid out in cash.  This rule will apply to both the retail investor who holds 500 shares of Company B, as well as the asset manager or hedge fund holding 5,000,000 shares of Company B. "According to page 56 of the 2015 IRS Publication 550 on Investment Income and Expenses: Wash sales. Your holding period for substantially identical stock or securities you acquire in a wash sale includes the period you held the old stock or securities. It looks like the rule applies to stocks and other securities, including options. It seems like the key is ""substantially identical"". For your brokerage / trading platform to handle these periods correctly for reporting to IRS, it seems best to trade the same security instead of trying to use something substantially identical." There's no objectively correct answer to this question, given your circumstances. Ideally, the stepmom would put in 60% of the downpayment and 60% of the monthly maintenance costs and mortgage. You and your partner would evenly split the 40%. Then, it is very obvious. However, my guess is that this isn't going to be the situation. Without knowing the numbers, I suggest that, upon sale of the house, the exact value of each person's downpayment is immediately returned without interest. What's left of the equity is returned to everyone as per the amount they paid in mortgage. The monthly maintenance costs are excluded from this calculation entirely. You are, of course, free to take any other approach all three of you deem to be fair. In my example, consider a home that costs $200,000. Your stepmom puts in $40,000 for a downpayment, you put in $10,000, and your parter puts in $10,000. The mortgage payments are $1500/month. Your stepmom puts in $500 a month, you put in $250 a month, and your partner puts in $750 a month. You sell the place for $300,000 after paying off the entire mortgage. Your stepmom gets $40,000 + $80,000. You get $10,000 + $40,000. Your partner gets $10,000 + $120,000. Keep in mind, though, that you may have to sell the house for a loss. In which case, some or all of the downpayment may not even be returned. In fact, you may end up having to cover money over and above the downpayment and the payments you've made. Any good lawyer will make you consider this. Additionally, any good lawyer will make you spell out under what circumstances, people can force sale of the home. Your understanding is incorrect.  The date of record is when you have to own the stock by.  The ex-dividend date is calculated so that transaction before that date settles in time to get you listed as owner by the date of record. If you buy the stock before the ex-dividend date, you get the dividend.  If you buy it on or after the ex-dividend date, the seller gets the dividend. Here's what Investopedia says about payouts for ex-dividend stocks: A stock trades ex-dividend on or after the ex-dividend date (ex-date). At this point, the person who owns the security on the ex-dividend date will be awarded the payment, regardless of who currently holds the stock. After the ex-date has been declared, the stock will usually drop in price by the amount of the expected dividend. Read more: Ex-Dividend Definition | Investopedia http://www.investopedia.com/terms/e/ex-dividend.asp#ixzz4Nl4J3s4k  I hope this helps. Good luck! This is not right. Inferring the employee stock pool’s takeaway is not as easy as just taking a fraction of the purchase price. As an example, that wouldn’t account for any preferred returns of other ownership classes, among other things.   All considered though, it’s reasonable to assume that the employee stock pool will get some premium. Best of luck. it sounds like you don't have experience in this, and neither does your *investor*; which is a recipe for disaster (pun intended).  Your first order of business is to check whether your investor is an *Accredited Investor* (google to see what it means), if s/he's not, **walk away**.  If s/he's an accredited investor, find a lawyer who can help you navigate this process, however these are the issues:  * lawyers are expensive, and lawyers who have experience in these type of transactions are even more expensive * you actually need 2 lawyers, one for you and one for the investor * if neither of you have experience, there will be a lot more billable hours from the lawyers.....  In principle this can go 3 ways:  1. The investors give you a loan, you pay them interests on a periodic basis, and then also principal.  Items to be negotiated: interest rates, repayment schedule, collateral, personal guarantees. Highly unlikely this is what the investors wants.  2. The Investors get equity. items to be negotiated: your compensation, % of ownership, how profits are divided, how profits are paid; who gets to decide what.  3. A combination of 1 and 2 above, a *Convertible Note*.  There's a lot more, too much for a Reddit post.  There's not an easy ELI5. On NYSE it isn't the equity which is listed but is an ADR(American Depositary Receipt). Source A negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction. Else people would make a killing on the arbitrage opportunity. Frankly speaking arbitrage opportunities are more or less non existent. They occur for maybe seconds or milliseconds and the HFT firms and banks trade on it to remove the arbitrage. "When the buyout happens, the $30 strike is worth $10, as it's in the money, you get $10 ($1000 per contract). Yes, the $40 strike is pretty worthless, it actually dropped in value today. Some deals are worded as an offer or intention, so a new offer can come in. This appears to be a done deal. From Chapter 8 of CHARACTERISTICS AND RISKS OF STANDARDIZED OPTIONS - FEB 1994 with supplemental updates 1997 through 2012; ""In certain unusual circumstances, it might not be possible for uncovered call writers of physical delivery stock and stock index options to obtain the underlying equity securities in order to meet their settlement obligations following exercise. This could happen, for example, in the event of a successful tender offer for all or substantially all of the outstanding shares of an underlying security or if trading in an underlying security were enjoined or suspended. In situations of that type, OCC may impose special exercise settlement procedures. These special procedures, applicable only to calls and only when an assigned writer is unable to obtain the underlying security, may involve the suspension of the settlement obligations of the holder and writer and/or the fixing of cash settlement prices in lieu of delivery of the underlying security. In such circumstances, OCC might also prohibit the exercise of puts by holders who would be unable to deliver the underlying security on the exercise settlement date. When special exercise settlement procedures are imposed, OCC will announce to its Clearing Members how settlements are to be handled. Investors may obtain that information from their brokerage firms."" I believe this confirms my observation. Happy to discuss if a reader feels otherwise." "When there is a trade the shares were both bought and sold. In any trade on the secondary market there has to be both a buyer and a seller for the trade to take place. So in ""lasttradesize"" a buyer has bought the shares from a seller." The answer provide by @mbhunter is correct, however there are contexts, shorting in spot market and carrying the position over settlement usually does not entail payment of dividend to the broker, one of the reason being post ex-date the price of the share downward adjusts to the extent of the dividend, so practically if you have shorted at 100 and post ex-date (assuming a dividend of 2 and no movement of the stock price), the price would slide to 98, the party who longed the stock @ 100 now is sitting on a price of 98 and received a dividend of 2 which equates to 100. The above is also contextual to the law of the country governing the exchange and the security exchange board regulations. All shares of the same class are considered equal. Each class of shares may have a different preference in order of repayment.  After all company liabilities have been paid off [including bank debt, wages owing, taxes outstanding, etc etc.], the remaining cash value in a company is distributed to the shareholders. In general, there are 2 types of shares: Preferred shares, and Common shares.  Preferred shares generally have 3 characteristics: (1) they get a stated dividend rate every year, sometimes regardless of company performance; (2) they get paid out first on liquidation; and (3) they can only receive their stated value on liquidation - that is, $1M of preferred shares will be redeemed for at most $1M on liquidation, assuming the corporation has at least that much cash left. Common Shares generally have 4 characteristics: (1) their dividends are not guaranteed (or may be based on a calculation relative to company performance), (2) they can vote for members of the Board of Directors who ultimately hire the CEO and make similar high level business decisions; (3) they get paid last on liquidation; and (4) they get all value remaining in the company once everyone else has been paid. So it is not the order of share subscription that matters, it is the class. Once you know how much each class gets, based on the terms listed in that share subscription, you simply divide the total class payout by number of shares, and pay that much for each share a person holds. For companies organized other-than as corporations, ie: partnerships, the calculation of who-gets-what will be both simpler and more complex. Simpler in that, generally speaking, a partnership interest cannot be of a different 'class', like shares can, meaning all partners are equal relative to the size of their partnership interest. More complex in that, if the initiation of the company was done in an informal way, it could easily become a legal fight as to who contributed what to the company. "To Many question and they are all treated differently. I was wondering how the logistics of interest and dividend payments are handled on assets , such as mortgages, bonds, stocks,   What if the owner is some high-frequency algorithm that buys and sells bonds and stocks in fractions of a second? When the company decides to pay dividends, does it literally track   down every single owner of that stock and deposit x cents per share in   that person's bank account? (This sounds absolutely absurd and seems   like it would be a logistical nightmare). In Stocks, the dividends are issued periodically. The dividend date is declared well in advance. As on end of the day on Dividend date, the list of individuals [or entities] who own the stock is available with the Stock-Exchange / Registrar of the companies. To this list the dividends are credited in next few days / weeks via banking channel. Most of this is automated. What if the owner is some high-frequency algorithm that buys and sells bonds and stocks in fractions of a second? On bonds, things work slightly differently. An Bond is initially issued for say 95 [discount of 5%] and payment of 100 after say 5 years. So when the person sells it after an year, he would logically look to get a price of 96. Of course there are other factors that could fetch him a price of 94.50 or 95.50. So every change in ownership factors in the logical rate of interest. The person who submits in on maturity gets 100.  For the homeowner, I'm assuming he / she still makes mortgage payments to the initial bank they got the mortgage from, even if the bank no longer ""owns"" the mortgage. In this case, does the trader on the secondary market who owns the mortgage also come back to that bank to collect his interest payment? This depends on how the original financial institution sells the mortgage to new institutions. Generally the homeowner would keep paying initial financial institution and they would then take a margin and pay the secondary investor. If this was collateral-ized as Mortgage backed security, it is a very different story."