What is a stock split?

You own 10 shares at $600, worth $6,000, with an average cost of $500. The company does a 3-for-1 split. You now own 30 shares at $200, still worth $6,000, and your average cost becomes $500 ÷ 3, about $166.67.

A reverse split works the other way. In a 1-for-10 reverse split, 100 shares at $2 become 10 shares at $20: still $200 in total.

JagSim applies a split to your holding as of the split date: your share count is multiplied and your average cost divided, so the value and the gain or loss do not change. Earlier trades in that stock are then shown in post-split shares, while Portfolio and Chart still show each trade as you made it, with a line for the split. A waiting order placed before the split is adjusted the same way. A fraction of a share left by a reverse split is paid to you in cash, as a broker does. How trading works on JagSim.

Does a stock split make me money?

No. You have more shares at a lower price and the same total value. The price may move after a split, but the split itself does not change what you own.

Why do companies split their stock?

Usually to bring a high share price down to a level more investors can buy in whole shares, and to make trading in round amounts easier.

What is a reverse split?

Several shares are combined into one at a higher price. Companies often do it to keep the share price above an exchange's minimum.

What happens to my open orders in a split?

Brokers handle it differently, so check yours. On JagSim a waiting order is adjusted to the new share count and price, and one left with less than one share is ended.