what happens your trade when a stock splits

[Guest Peter]

Just wondering what happens your trade on a particular stock when that stock splits.  For example recently PTSI and FSFG (both US stocks) split which drove the share price way down.  What would have happened my position had I a long position in one or both of these stocks?  The new price would have taken gapped miles past any potential stop I would have had.  

[MongiIG]

On 18/09/2021 at 22:24, Guest Peter said:

Just wondering what happens your trade on a particular stock when that stock splits.  For example recently PTSI and FSFG (both US stocks) split which drove the share price way down.  What would have happened my position had I a long position in one or both of these stocks?  The new price would have taken gapped miles past any potential stop I would have had.  

Hi Guest Peter

Thanks for your question. What will happen to your shares position if a company performs a stock split or consolidation ? If you have a position on a company which performs a stock split or consolidation, we’ll close your original position at its opening level and open a new trade on your behalf. The new position will reflect the ratio of the split/consolidation, ensuring that you don’t gain or lose any capital in the process.

Any attached stops or limits will be adjusted according to the terms of the split/consolidation to ensure your monetary risk remains the same.

Stock split example

Apple announce a stock split at a ratio of 10-1. On the ex-date, you have 100 shares trading at $5 per share.

We close your original position, and open a new one. You now have 1000 shares trading at $0.50 per share – so the total size of your position remains the same.

Please note: This information is intended as a generic example, and subject to change at any point. It may not apply in every scenario.

 

All the best - MongiIG