Ex-Rights

Ex-rights - Ex-rights refer to the purchase of stock that no longer has the option for the investor to purchase additional shares at below market price. Ex-rights are still trading on the exchange but no longer have the rights attached because they have either expired, were transferred to another investor, or has been exercised (used up). Therefore the original rights are no longer valid for whatever reason. It goes without saying that ex-rights stocks are valued less than stocks, which still have the rights, attached to them. These attached rights may be traded separately in order for the shareholder to decide if he or she wants to retain the rights or sell them; hence one of the reasons that stock is sold as an ex-rights.