About stock splits
When calculating trade gains, RevoGain takes stock splits and reverse stock splits into consideration because it affects the underlying asset cost basis.
What stock splits are supported?
The following table shows what stock splits are considered by RevoGain:
| Date | Ticker | Ratio | |------------|--------|----------| | 2021-11-18 | ANET | 4 | | 2021-10-05 | ISRG | 3 | | 2021-10-13 | MCHP | 2 | | 2021-08-02 | GE | 0.125 | | 2021-07-20 | NVDA | 4 | | 2021-06-28 | CSGP | 10 | | 2021-06-29 | CSX | 3 | | 2021-06-17 | TTD | 10 | | 2021-04-01 | SHW | 3 | | 2021-03-05 | APH | 2 | | 2020-12-14 | BEPC | 1.5 | | 2020-12-14 | BEP | 2 | | 2020-11-17 | DQ | 5 | | 2020-11-24 | TMX | 4 | | 2020-10-24 | NEE | 4 | | 2020-08-31 | AAPL | 4 | | 2020-08-31 | NVDA | 5 | | 2020-07-01 | ODP | 0.1 | | 2020-06-01 | EW | 3 | | 2020-06-16 | FSK | 0.25 | | 2020-06-11 | GRPN | 0.05 | | 2020-05-20 | IVR | 1.163636 | | 2020-01-27 | OVV | 0.2 | | 2019-10-01 | FVE | 0.1 | | 2019-09-16 | VGR | 1.05 |
If you know about a stock split or reverse stock split that we don't currently have support for, please send us an email at support@revogain.com, and we'll add it to our stock split registry.
A stock split trading gain example
Let's assume we have the following Buy and Sell trades.
| Date | Ticker | Type | Quantity | Price per share | Total Amount | Currency | |----------------|--------|------|----------|-----------------|--------------|----------| | 02-02-21 15:45 | NVDA | BUY | 1 | 535.8 | 535.8 | USD | | 02-07-21 15:45 | NVDA | SELL | 0.25 | 816.07 | 204.0175 | USD | | 20-07-21 16:14 | NVDA | SELL | 0.25 | 206.71 | 51.6775 | USD | | 19-11-21 16:14 | NVDA | SELL | 2.75 | 329.85 | 329.85 | USD |
So, when applying the FIFO accounting method to calculate the trade gain, this is what we get:
| Ticker | Sell Date | Buy Date | Sell Price | Buy Price | Quantity | Gain Amount | Stock Split | |--------|------------------|------------------|------------|-----------|----------|-------------|-------------| | NVDA | 2021-07-02 15:45 | 2021-02-02 15:45 | 816.07 | 535.8 | 0.25 | 70.0675 | 0 | | NVDA | 2021-07-20 16:14 | 2021-02-02 15:45 | 206.71 | 133.95 | 0.25 | 18.19 | 4 | | NVDA | 2021-11-19 16:14 | 2021-02-02 15:45 | 329.85 | 133.95 | 2.75 | 538.725 | 4 |
Because NVDA has undergone a 4:1 stock split on the 20th of July 2021,
there's a stock price and quantity adjustment being done for the SELLcode> trades that happened after the stock split
in case the associated BUYcode> trades were operated before the stock split.
Next, I'm going to explain line-by-line how the stock split works.
Calculating the gain for the first SELL position
The first SELL position for NVDA happened on 2021-07-02 15:45.
And, the first BUY position was executed on 2021-02-02 15:45.
The quantity of the first SELL position is 0.25, while the
quantity of the first BUY position is 1.
So, the gain for the first SELL position can be covered entirely by the first BUY position,
and we get a gain of 0.25 X ($816.07 - $535.8) = $70.0675.
| Ticker | Sell Date | Buy Date | Sell Price | Buy Price | Quantity | Gain Amount | Stock Split | |--------|------------------|------------------|------------|-----------|----------|-------------|-------------| | NVDA | 2021-07-02 15:45 | 2021-02-02 15:45 | 816.07 | 535.8 | 0.25 | 70.0675 | 0 |
Notice that we only sold0.25out of1that was the original quantity of the associatedNVDABUYposition. Therefore, the firstNVDABUYposition now has a balance of(1 - 0.25) = 0.75.
Calculating the gain for the second SELL position
The second SELL NVDA position for NVDA happened on 2021-07-20 16:14 after the stock split.
And, since the first BUY position that was executed on 2021-02-02 15:45 still has an unsold
balance of 0.75, we can use that when calculating the gain of the second SELL position.
However, since we have a stock split, the price and the quantity of the existing BUY position are calculated as follows:
New Price = Old Price / Split Rate = 535.8 / 4 = 133.95New Quantity = Old Quantity * Split Rate = 0.75 * 4 = 3
Therefore, the second trade gain uses the new price and quantity for the associated BUY position:
| Ticker | Sell Date | Buy Date | Sell Price | Buy Price | Quantity | Gain Amount | Stock Split | |--------|------------------|------------------|------------|-----------|----------|-------------|-------------| | NVDA | 2021-07-20 16:14 | 2021-02-02 15:45 | 206.71 | 133.95 | 0.25 | 18.19 | 4 |
The gain realized by selling 0.25 stocks from the first BUY position
generates a gain of 0.25 X ($206.71 - $133.95) = $18.19.
And, the associated BUY position has a remaining quantity of (3 - 0.25) = 2.75.
Calculating the gain for the third SELL position
The third SELL NVDA position for NVDA happened on 19-11-21 16:14.
Since the first BUY position that was executed on 2021-02-02 15:45 has an unsold
balance of 2.75, we can use that when calculating the gain of the second SELL position.
However, since there was a stock split between the SELL and BUY positions,
the price and the quantity of the existing BUY position are adjusted according to the stock split.
| Ticker | Sell Date | Buy Date | Sell Price | Buy Price | Quantity | Gain Amount | Stock Split | |--------|------------------|------------------|------------|-----------|----------|-------------|-------------| | NVDA | 2021-11-19 16:14 | 2021-02-02 15:45 | 329.85 | 133.95 | 2.75 | 538.725 | 4 |
The gain realized by selling the remaining 2.75 stocks from the first BUY position
generates a gain of 2.75 X ($329.85 - $133.95) = $538.725.
And, the associated BUY position is now fully liquidated after it generated an overall gain of $626.98.
What if I have hundreds of such transactions?
Applying the FIFO strategy for hundreds of stocks and crypto transactions can be a very daunting task, especially if some of the stocks undergo splits.
Luckily, you don't have to do any manual calculations by yourself. RevoGain can do that for you.
With RevoGain, you can calculate your gains in just a few seconds so you can enjoy spending your time doing the things you love instead.