This might not be a GNC question as much as Commodities Trading 101 question.
So I have been trying to get my head wrapped around what exactly is a stock split at a very fundamental level (leaving specifics of entering into personal financial management software out). Mr. Ralls was nice enough to give me how-to enter BHF split from MET back in February that took place on July 18 2017; not exactly a stock split but a spin-off. Thanking him for giving me a "fish" at that time. But now I want to "go fishing" myself for how splits work and understand the mechanics of it. What is *incorrect* in this not so elegant statements (and example): - Buy X shares for total of $Y on date ABC (example: 3 shares at $5 = $15 total cost) - On the split date that is post ABC date, it splits at a ratio of 2.5:1. My total number of shares increase by 1.5X plus original X for total equal to 1.5X + X or 2.5X (example: 2.5*3 = 7.5 shares) -- I have not mentioned any changes to cost basis here on purpose - original cost basis remains as is but this simply increases number of share that I now have - Since I had odd number of shares so if I am paid cash in-lieu for fractional shares, wouldn't the broker SELL my 0.5 shares at whatever the going market price is and then deposit that proceeds into my account say $Z amount (example: paid me $2) - Is capital gain on the fractional share: $Z - ($Y/2.5X)*shares_sold (example: $2 - ($15/7.5)*0.5 = $2 - $1 = $1) Thanks. _______________________________________________ gnucash-user mailing list [email protected] To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
