Here's a conversation I had with an OptionsHouse costumer rep, on 2/05/2010, on the subject of their Dividend Reinvestment programs (commonly known as DRIPS). Apparently, they cannot pay you your dividends in fractional (partial) shares. If the dividend received is enough to buy you whole shares, then they will buy you whole shares and pay you the rest of the dividend in cash, instead of a fractional share.
Here is the conversation:
Please wait for a customer service representative to respond.
You are now chatting with Dan
Welcome to OptionsHouse, how may I help you today?
Dan: Hello. How may I assist you?
Elwalvador: Hi, I wanted to know if optionshouse offers DRIP programs?
Elwalvador: dividend reinvestment
Dan: yes we do
Dan: To request dividend reinvestment on your account please send your request to customerservice@optionshouse.com which must come from your e-mail address on file and the e-mail must contain the following pieces of information:
Dan: 1) The e-mail/letter must list name(s) of account holder(s).
Dan: 2) The last four digits of social security number(s) of account holder(s).
Dan: 3) The account holder’s date of birth.
Dan: 4) At a minimum, the last four digits of the account number in question.
Elwalvador: is there literature on how the program works? For example do we get fractional shares
Elwalvador: Is there a link to an optionshouse.com page that explain it?
Dan: nothing on the website
Dan: DRIP is only in whole shares
Dan: no partials
Elwalvador: ok so some of the dividend would be paid in cash then and would be taxable
Elwalvador: ok and I can do this for ETf's too?
Dan: yes
Elwalvador: I'm thinking about doing this for PEY. Thanks for the help.
Dan: You're welcome
Elwalvador: Have a good day, bye
