RSA (Reverse Split Arbitrage) for beginners
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Important information on RSA plays
RSA Plays/Signals - A potential stock that is doing an upcoming reverse stock split found by SlugSplit's algorithms.
Reverse Stock Split- The company is replacing several old shares with fewer new ones. An 8-for-1 reverse split turns 8 old shares into 1 new share.
Brokers do not all treat a leftover fraction the same way. Round up and round to nearest can leave you holding one new share.
Buy 1 old share. One old share is only a fraction of the new share. A round-up turns that fraction into one new share.
You do not have to work that out by hand. The Buy amount column is that count. An 8-for-1 round-up shows 1.
Not all plays will round up. Sometimes the company would pay you cash and buy up your fractional shares. Other times, they will just leave you with fractional shares.