Personal Finance & Money Asked by EHSK on November 15, 2020
I recently had an issue where I was trying to get a couple of shares of a stock about to split. I’m a micro-investor, so I was only able to afford shares after the split, and not enough to buy a whole share prior to the split and sell some after. The split was 4 for 1 (yes, it was AAPL), and I wanted two shares at the after split price.
I set a limit for that price, but then when the split happened, my limit order was also split, making the trigger share price 1/4 of the then current price.
While I get why that math works that way, it didn’t function as I expected. I expected it to trigger at the price I set for the limit.
Should I have been able to set up this trade this way? I’m almost positive I had done this in years past. Or is there a special way I have to set this up? Or, can different brokerages handle these kinds of trades differently?
With a limit order below current price before the split, your limit order will be below the post split price due to both being adjusted identically by the split ratio.
In both circumstances, in order for your limit order to be triggered, share price (the ask) must drop down to your limit order. It's as simple as that.
Limit orders are handled the same way by all brokers.
Answered by Bob Baerker on November 15, 2020
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