When you hold a position open through a stock split, your number of shares and price per share will change for that position. For example, if you bought 1000 shares of HEP pre-split at $60 per share and carried the position through a 2-for-1 split, you now hold 2000 shares of HEP at $30 per share (half the initial cost).
In order for TradeLog to correctly match your (pre-split) opening transactions to the subsequent closing transactions, the pre-split transactions must be adjusted for number of shares and price. The Stock Split function enables a user to make the necessary adjustments in a few easy steps.
To adjust for a stock split:
Find the ticker that needs to be adjusted for a split using the Find, Ticker command.
Find and select the record showing the last trade made before the split.The profit/loss summary bar will show the number of shares open going into the split - These are the shares that need to be adjusted.
From the Adjustments menu, click Stock Split (or the keyboard shortcut Ctrl + S).
The Adjust for Stock Split popup window will appear.
In the fields provided, enter the ticker description and split ratio. The split date will be the date of the last trade before the split. DO NOT change this date to the actual split date as you may have trades on this date which are post-split.
Click OK. TradeLog will adjust the number of shares and price in all selected records.
- To ensure proper trade matching, you may need to use Adjustments, Rematch. The program will re-sort, re-match and renumber your trades using strict FIFO trade matching.
Additional notes on stock split adjustments:
All stock splits do not result in even lots.. For example, if 65 shares of ABC splits 3 for 2 the share amount increases to 97.5 shares post split. Since most companies pay out a cash or dividend equivalent to the fractional shares remaining, users of TradeLog may need to manually edit the share amount to agree with their broker - see note on Manually Editing Fractional Shares.
To account for any cash received in lieu of fractional shares, you would calculate the new per-share price to include the cash in the "amount" column.
TradeLog primarily handles trade accounting for all transactions that are required to be reported on IRS Schedule D. It does not support cash distributions or cash dividends, as these are reported on your Form 1040 - please see our Tax Topic on Cash Dividends. In addition, brokers will include cash dividends on your Form 1099 but generally will not report these on your trade history reports. For these reasons, if you have received a cash dividend we suggest that you account for this cash independently of your TradeLog software.