Sometimes the number of shares you own changes, or cash appears in your account, without you placing a trade. These corporate actions are routine, but they confuse people — and a simulator handles some of them and not others. This module covers the arithmetic, and how to fill in what the simulator leaves out.
A dividend is cash a company pays its shareholders out of profits. Four dates matter:
On the ex-date, the share price typically opens lower by roughly the amount of the dividend, because the cash is leaving the company. A $50 stock paying a $1 dividend will, other things being equal, open around $49. You have not lost anything: you hold a $49 share plus a $1 payment on its way. That is why buying just before the ex-date to “capture” a dividend does not create free money.
RiskStock Paper Trading does not credit dividends. So on every ex-date, a dividend-paying position shows the price drop but never receives the cash. Over a year, an income-focused practice portfolio will look worse than it really performed, and a comparison between a dividend stock and a non-payer will be tilted against the payer.
The fix is a simple dividend log in your notes:
You can find a holding’s dividend per share, frequency and ex-dates on the Dividends page.
In a stock split, a company gives each shareholder more shares, each worth proportionally less. Nvidia’s 10-for-1 split in June 2024 turned every share into ten. Your share count multiplies, your average cost divides by the same number, and the value of your position does not change at all.
The simulator applies splits automatically: it multiplies your shares, divides your average cost, leaves your cash untouched, and adds a “split” row to your trade history so you can see it happened. Without that adjustment, a split would appear as a sudden collapse — or, for a reverse split, a spectacular gain — that never really occurred.
A reverse split works the other way: in a 1-for-10 reverse split, every ten shares become one share worth ten times as much. The arithmetic is the same — divide shares, multiply average cost — and again the value does not change.
The context often does matter. Companies usually reverse-split because their share price has fallen very low. The NYSE and Nasdaq generally require a listed stock to stay at or above $1, and a company can be delisted if it stays below for too long. A reverse split fixes the price without fixing the business, so treat one as a prompt to re-read your thesis.
Some corporate actions are more complex, and the simulator does not handle them:
If a practice position’s price stops updating or looks wrong, check the company’s news first. Then record what a real shareholder would have received — cash, new shares, or nothing — and adjust your notes accordingly, selling the stale position in the simulator at the value a real holder would have got if that is possible.
Real brokers credit dividends as cash. Many offer a dividend reinvestment plan (DRIP) that uses the cash to buy more shares; at many Canadian brokers this is a “synthetic” DRIP that buys whole shares only and pays any remainder in cash. Outside a TFSA or RRSP, dividends are taxable in the year you receive them, even if they are reinvested. Canadians receive a dividend tax credit on eligible Canadian dividends, and US dividends usually have 15% US tax withheld outside an RRSP. The Dividends & Income and Master Your Money courses cover those rules in full.
Educational purposes only; not financial advice. Paper trading is a simulation: no real money or securities are involved, and simulated results do not reflect the spreads, fees, currency conversion, taxes or emotions of real investing. Historical figures are illustrative and are not a forecast. Always do your own research and consult a licensed advisor.