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 SELL
code> trades that happened after the stock split
in case the associated BUY
code> 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 sold0.25
out of1
that was the original quantity of the associatedNVDA
BUY
position. Therefore, the firstNVDA
BUY
position 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 = 133.95
New 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.