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RoboMarkets: information regarding GE reverse stock split

information regarding GE reverse stock split

Dear Clients and Partners,

On July 30th, 2021, General Electric (GE, GE.ny) will have its stock go through a reverse split with a ratio of 1:8.

A reverse stock split is a corporate action as a result of which the company reduces the number of issued shares by a specific multiplier and simultaneously increases the value of each share by that multiplier. GE's split for example will mean that a shareholder who had 8 shares that are worth 13 USD each or 104 USD in total will have 1 share worth 104 USD.

How will it influence positions and orders?

If you have open positions in GE or plan to open such positions, please pay attention to the following changes, which will happen between 31st of July and 2nd of August.

MetaTrader 4 / MetaTrader 5 accounts

  • All pending orders (Buy Limit, Buy Stop, Sell Limit, Sell Stop, Buy Stop Limit, Sell Stop Limit, Stop Loss and Take Profit) orders on GE will be cancelled before the session opens at 16:31 on the 2nd of August.

  • The opening price of all positions that are open as of 15:00 (server time) on the 2nd of August on GE will be multiplied by 8.

  • The volume of all open positions on GE will be divided by 8.

  • In case the total exposition in GE is not a multiple of 8, the account will retain an open position with a volume that is a multiple of 8. The remaining volume will be closed at the last price of the 30th of July (Bid price will be used for Buy positions and Ask price for Sell positions).

Example:

In case you had one position with a total volume of 42 shares purchased at a price of 12, as of the 2nd of August, your account will have one open position with a volume of 5 and an opening price of 96 (12*8) and cash transaction with an amount equal to the result of closing the remaining 2 shares at the last price of the 30th of July.

In case you had several positions, they will all be combined into one position. The new position will have the opening price based on an average weighted price of all positions held before the split. If you had 3 following positions, 10 shares purchased at a price of 12; 20 shares purchased at a price of 12.5; 12 shares purchased at a price of 13, as of 2nd of August, your account will have:

  • an average weighted price of all positions is (10*12 20*12.5 12*13)/42= 12.52

  • one open position with a volume of 5 and an opening price of 100.16 (12.52*8)

  • 2 positions closed with 0 result

  • cash transaction with an amount equal to the result of closing the remaining 2 shares at the last price of the 30th of July.

In case the total exposition in GE is less than 8, the position will be closed at the last price of 30th of July (Bid price will be used for Buy positions and Ask price for Sell positions).

R Trader accounts

The Split procedure will run on the server at 15:00 server time.

  • During the procedure, all active pending orders (Buy Limit, Sell Limit, Take Profit, and Stop Loss) for GE and GE.ny will be cancelled.

  • The opening price of all positions that are open as of 15:00 (server time) on the 2nd of August will be multiplied by 8.

  • The volume of all open positions will be divided by 8.

  • If you hold more than one position in any of those instruments in one direction, they will all be combined into one position. The new position will have the opening price and a volume based on an average weighted price of all positions held before the split.

  • In case a deal receives fractional shares, such shares will be liquidated for cash transaction - "Split cash correction". The volume of other deals for the related instrument will be reset to 0 and moved to History Tab.

Pay attention to Expert Advisors (EA)

If you are using an Expert Advisor (EA), we suggest that you double-check with its developers whether its code needs any modifications to ensure that the EA operates correctly after the stock split.

The historical charts in your trading terminal will be updated to reflect the new prices of the instruments. Please, take into account this information when planning your trading activity.

All other aspects of trading conditions shall remain the same unless otherwise stated.

Sincerely,
RoboMarkets team


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