Most people aren't going to put 100% of their portfolio wheeling Amazon dude. It opens up options to a lot more portfolios when you need to use 3500 in capital instead of 35,000. People getting in on options is an increase in liquidity.

There are good reasons why stock splits can increase price that don't rely on psychological factors.

This post was edited by NetflixAdaptationWidow on Mar 29 2022 06:16pm

this Is just wrong.

What part of it?

In my opinion your statement is in itself a psychological factor based on the perception of a smaller buy-in opportunity. Thus it is the speculation that as the stock splits that it would push up the price of the company. The converse would be that, assuming that youre right in your part, in the event of the cost of the company (market cap) going up that the current shareholders would not sell their shares at a higher price. Especially if the increase of price puts the company above the intrinsic value which would cause the company, if they have a capital allocator worth their salt, would sell authorized shares at the increased price.

Therefore the entire scenario is based on psychology, and perception

This post was edited by FrenchVanilla on Mar 29 2022 08:02pm

You use a lot of words to say very little.

but none the less the very little i said is correct.

Nothing you said is correct.

You clearly don't know what intrinsic value means, nor do you understand capital requirements for basic options strategies.

So please do explain, id love to hear how a stock split will affect the decisions of a company or real investors in terms of intrinsic value. Or even what your interpretation of intrinsic value is.

And just because the price goes down and makes options cheaper, the amount cheaper of the options is correlated to the drop in in share price. Sure the nominal cost per contract goes down, which is what I'm sure you're alluding to in terms of capital requirements. But your entire premise is based that there are armies of hopeless gamblers with under like 500 dollars just waiting to throw money into lower cost options they otherwise couldn't afford, which is just silly. Also if the volatility randomly spikes up the price of options goes up anyway.

So again i ask. please enlighten me on how any of this is going to affect anything.

This post was edited by FrenchVanilla on Mar 29 2022 11:55pm

lower share price = easier for retail investors to afford both shares and options = increased volatility

your premise that stock splits don't effect trading behavior is kinda silly... why are stock splits even a thing then?

generally stock splits *should* be bearish, means the stock is trying to attract non-institutional investors, it is perceived as overall bullish though because it is usually successful in attracting those investors

i agree stock splits used to affect retail investors maybe 15+ years ago. since then though fractional shares have become a possible method of ownership so i don't see it affecting retail investors on the ownership side becuase those who want to get in, can.

as for the options side yes you may get slightly more volatility but whos to say in what direction. (in terms of immediately after the split)

also as for it being bearish or bullish in perception i guess that would be more of an individual thing. i see it as neither bullish or bearish personally as a general rule so to speak, but i suppose people can differ.

This post was edited by FrenchVanilla on Mar 30 2022 08:05am