Is this normal

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Zaid Amir
17
Zaid Amir  

So I've been using MT5 for the past couple of weeks. I opened a several demo accounts with a local brokerage and I was testing various positions. One of the demo accounts I setup just to test stock splits so I bought some TSLA at $2201. Yesterday the split went through and I woke up to find my position in the negative.

My position remained the same and I was owing almost $30K. I contacted my broker asking about why the position wasn't automatically adjusted and this is the response I got:

"Let me explain for you the process when stock split occurs. In real accounts, the positions are closed before the stock split. There are no adjustments in the positions. 

In your case, because it is a demo account, there were no adjustments thus, you witnessed a decrease in price thats why your balance became negative.

Stock splits and contracts expiration are adjusted  by closing the positions before the events."



So my question is, is this a normal scenario for stock splits?


Rene Fernando Tovar Macchi
165
Rene Fernando Tovar Macchi  
Hi Zaid Amir, in my experience, the response you got from your broker is what most brokers do for REAL accounts, they just communicate a few days before the split that they will close your positions impacted by the split before CloseOfBusiness of the last day before the split.  They usually add that if you don't want your position closed automatically, then close it yourself before that deadline.  In the case of DEMO accounts, most brokers don't care.  Since it's not REAL money, I would just close that negative position, or open a new DEMO account.  Hope that helped.
khalid khan
225
khalid khan  
I think this is normal scenario because it is demo account 
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