Risks: read before you trade round-ups

Not financial advice. This site lists what companies say in their filings. It does not recommend buying or selling any security. Round-up trading can lead brokers to restrict or close your accounts.

Brokers can restrict or close accounts

Users have publicly reported brokers freezing, reviewing, restricting or closing accounts used to buy small positions ahead of round-up reverse splits, sometimes across many accounts and sometimes affecting linked household accounts. Brokers can generally end a customer relationship under their account agreements. Closing or transferring accounts can cost fees, and moving retirement accounts out in a hurry can have tax consequences. See the user reports on the brokers page.

You may not receive a whole share

Participant-level rounding: the company rounds your broker's total position, not yours.
Broker processing: some brokers wait weeks for issuer delivery and may show a placeholder fractional position that cannot be sold.
Terms change: companies can change the ratio, the date or the fractional treatment, or abandon the split.
Our extraction can be wrong: labels are produced automatically from filing text.

Market and liquidity risk

Companies doing reverse splits are often trying to stay listed, may be raising dilutive capital, and their shares can fall sharply around the split. Spreads can be wide and shares can be halted.

Taxes and costs

Cash in lieu and round-up shares can have tax consequences. Fees, OTC surcharges, transfer costs and your time can easily exceed a few dollars of gain.

Our position

We publish filing data for information only. We are not a broker, adviser or tax professional. Do your own research and consult a qualified professional.