Optional dividends generally allow shareholders to choose between cash or stock for their dividend payment. If one of your securities offers an optional dividend, you'll see a paper clip icon next to that security when viewing your positions from the My Account tab and selecting Positions. (Note that the paper clip icon can also signify that some other action is required). Your account default is set to accept optional dividends based on the Issuer Default; however, as a shareholder, you can specify how you would like to receive an optional dividend by changing either your account default settings or event-specific settings from the My Account tab:
- To change your account default settings for optional dividends, select My Information & Preferences, and navigate to the Account Preferences tab. Under Online Trading Settings, the third selection states Accept Optional Dividends as, from which you can select Cash, Stock or Issuer Default.
- To select an optional dividend payment for a specific position (event-specific), select Positions, click the paper clip next to the security whose optional dividend selection you'd like to change, and you will be prompted to select either cash or stock.
You can update your optional dividend selection up until the reply date. If you don't change the default settings on a specific optional dividend in your account, the optional dividend selection will default to the account default. If you choose stock, it will be acquired commission-free; only whole shares will be purchased. Any funds remaining after purchasing shares will be placed into your cash balance. Optional dividends are not eligible for Scottrade's commission-free Flexible Reinvestment Program® (FRIP®).
Please note the amount of stock or cash the company is going to issue as part of the dividend may have limitations; therefore, you may not receive the entire dividend as you instructed. You should review the material issued by the issuing company or visit the issuing company's website for complete details of the dividend.