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Why does a piece of a share lose money too?
Half a share moves with the same price as a whole share. The dollars are smaller because the count is smaller. The direction is the same.
The short answer
Half a share moves with the same price as a whole share. The dollars are smaller because the count is smaller. The direction is the same.
The position
Here is one position (hypothetical, made-up prices). The count is 1.5 shares. The first figure in the story is $100. The later figure is $70.
| What you are looking at | Count | Price | Value | Versus the first total |
|---|---|---|---|---|
| The first total | 1.5 shares | $100 | $150 | $0 |
| After the price fell | 1.5 shares | $70 | $105 | −$45 |
The bottom row is this account. The −$45 is the gap. The price fell. Holding does not put the first figure back. These figures are made-up, so the subtraction stays checkable after the market moves.
Start with the count. 1.5 shares at $100 comes to $150. The later price is $70. The same count at that price comes to $105. Subtract. $150 minus $105 is $45. That is the whole table. It is not a fee hiding in the price, and it is not a forecast of tomorrow.
How to check it on the statement
Read the count first. Then read the price the statement used. Multiply those two yourself. If your product is not a share, multiply the point move by the contract size instead of multiplying a share price. The number you get should match the value in the table, or you are looking at a different count.
Write the first total on one line and the later total under it. The gap is a subtraction. Do not add a second story, such as a fee or a dividend, until you see that line on the statement. A missing line is a zero, not a guess.
If you sold part of the position, split the page into the cash that left and the count that stayed. Add those two. A sale of one piece does not freeze the price of the piece you kept.
If the order never filled, the statement still shows the old count. Look in the order history for a cancel, an expiry, or a limit the market never traded. The position page will not show an order that died.
Do this before you decide what the market "meant." The dollars are the count times the price you can point at. The reason can wait until those two numbers are written down.
What happened
You hold 1.5 shares, bought at $100. That cost $150. The price fell to $70. One and a half times $70 is $105. The gap is $45. A neighbor with 100 shares at the same prices is down much more in dollars and the same way in direction. Your fraction did not get a private price. Whether your broker even lets a 1.5 share position sit there is the broker's rule. If the statement shows 1.5, this is the math.
How to read a brokerage statement shows the count you still have and the price the statement used. It does not replay the order you meant to send. If the statement's count disagrees with this page, use the statement and do the subtraction again.
What this is not
A cash-in-lieu payment is what happens when a fraction is too small to keep, often after a split. Cash in lieu of a fraction is that check. This page is a fraction you still hold, and the price fell. Do not wait for a check that belongs to a different event.
The account does not undo it
A TFSA or an RRSP changes the tax treatment of what is inside. It does not put the first price back. The shelter does not pay the gap back, and a lower price does not hand contribution room back. Room follows the contribution rules, not the chart. A taxable account shows the same mark. The wrapper decides tax. The count and the price decide the dollars.
If the custodian does not allow this product, the custodian's list wins over a general description. The math above is only for a position the account actually holds.
What to write down
- The exact count, including the fraction.
- The price you paid.
- The later price.
- The broker's rule only if the statement's count disagrees with yours.
Then subtract. If a step is missing, the gap on the screen is not explained yet. Do not fill the blank with a rate, a fee, or a yield you did not read off a statement or a contract spec.
Questions
Is a fraction immune? No. It uses the same price. The dollars are the count times the price.
Why is the loss only $45? Because you hold 1.5 shares, not 100. The price move is $30. One and a half times $30 is $45.
Will I get cashed out? Not from this page. Cash in lieu is a different event. Here you still hold the fraction.
Does a TFSA round it to a whole share? No. The shelter does not round the count up.
Are these the live prices? No. They are hypothetical, so the −$45 stays checkable.
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