Final answer:
Orders placed below market (OBLOSS) on the ex-dividend date are cancelled, as the stock price is adjusted to reflect the fact that new purchasers will not receive the current dividend.
Step-by-step explanation:
On the ex-dividend date, orders placed below market (OBLOSS) are cancelled. This means that if you have a pending order to buy a stock, and the amount you are willing to pay is below the market price on the ex-dividend date, the order will be removed from the system and will not be executed. The reason for this is that the stock price is typically adjusted downwards on the ex-dividend date by the amount of the dividend, to reflect the fact that new purchasers no longer have the right to receive the current dividend. Therefore, existing orders below the new market price could be executed at an unintended, more favorable price which is not in line with the current market conditions.