Price Data Adjustments

Adjusted Data

At StockCharts, we adjust our historical price data to remove gaps caused by stock splits, dividends, and distributions. That may cause our charts to look different from other services that do not perform the same adjustments.

We do this in order to give a more accurate representation of the historical performance of a ticker symbol, which is important when using technical analysis techniques on charts.

For example, if a stock splits 2-for-1, the price is suddenly half of what it used to be, creating a large gap down on the chart. If you were unaware of the split, the chart would give you the impression that something bearish happened to the underlying company. In addition, most of the technical indicators on that chart would give sell signals because of the significant price drop. Even though such a split is considered a neutral event, an unadjusted chart would contain many bearish signals.

We strive to adjust all the historical data before the event to prevent these misleading signals from appearing on our charts. In the case of a 2-for-1 split, we divide all of the historical prices for the stock by 2, then multiply all of the historical volumes by two so that the bars before the split match up smoothly with those that appear after the split.

In addition to performing adjustments that remove large gaps caused by splits, we adjust our historical data to remove smaller gaps caused by dividends and distributions. By making these additional adjustments, we ensure that our adjusted charts show the real total return for the instrument instead of just price returns.

Cool Tip: Whenever an event occurs that requires adjusting a stock's historical data, we add it to the list of recent adjustments on our Recent Data Adjustments page.

Unadjusted Data

While these adjustments are important for an accurate representation of historical performance, they can cause problems in the following circumstances:

1. Our adjusted historical price data cannot be used to determine the actual buy or sell price for a stock at some point in the past.

2. Our adjusted historical price data may not match the unadjusted data from other sources.

3. Adjusting historical price data can cause P&F reversal points to change if “Traditional” box scaling is used (the default).

In these situations, you may prefer to view a chart that has not been adjusted. For most ticker symbols, StockCharts also offers unadjusted charts, where the price data has not been adjusted for dividends or distributions.

Note: Our charts, whether adjusted or unadjusted, are ALWAYS corrected for splits.

Charting with Adjusted or Unadjusted Data

By default, all of our ticker symbols are adjusted for splits, dividends, and distributions. Simply enter the ticker symbol (e.g. "MSFT") in any of our tools, and you will see data for Microsoft that has been adjusted for splits, dividends, and distributions.

If you would like to view unadjusted data for a ticker symbol, add an underscore character to the front of the ticker symbol (e.g. "_MSFT"). The chart will use price data that has not been adjusted for dividends or distributions (although it will still always be adjusted for splits).

Important Note: Unadjusted data is only available for daily and longer-period charts. Our intraday charts always use adjusted data, regardless of whether the chart is configured for unadjusted data.

On the SharpCharts Workbench, you can also configure the chart to use unadjusted data by unchecking the "Adjust for Dividends" checkbox in the Chart Settings.

How Data Adjustments Are Made

We go through a specific process to adjust historical data when a split, dividend, or distribution occurs.

Dividend Adjustment Calculation Details

Historical prices are adjusted by a factor calculated when the stock begins trading ex-dividend. The dividend amount is subtracted from the prior day’s price; that result is then divided by the previous day’s price. Historical prices are subsequently multiplied by this factor.

Let's look at this example. A stock closes at $40.00 on Monday. On Tuesday, it begins trading ex-dividend based on a $2.00 dividend. If the stock opens unchanged, it will be trading at $38.00. Unless we adjust the prior prices, the chart will show a misleading $2.00 gap.

To calculate the adjustment factor, we subtract the $2.00 dividend from Monday's closing price ($40.00 - $2.00 = $38.00). Then, we divide 38.00 by 40.00 to determine the dividend adjustment in percentage terms. The result is 0.95.

Lastly, we multiply all historical prices before the dividend by a factor of 0.95. This adjusts historical prices proportionately to stay rationally aligned with current prices.

Split Adjustment Calculation Details

Adjustments for stock splits are similar, but to calculate the factor, you have to divide the number of shares after the split by the number of shares before the split. (Example: To adjust for a 2-for-1 split, divide 1 by 2. The factor is 0.5.)

Like dividend adjustments, we multiply all historical prices before the split by 0.5.

With splits, we adjust the volume in the opposite direction of prices to maintain the total liquidity. So, where we divided 1 by 2 to calculate the adjustment factor for prices, we now divide 2 by 1 to calculate the adjustment factor for volume. In this case, the adjustment factor for volume is 2.0, so we multiply all volume before the split by the adjustment factor of 2.0.

Reverse splits are calculated the same way as regular splits. For a 1-for-4 reverse split, for example, you would divide 4 by 1 to calculate the adjustment factor for prices (4.0) and divide 1 by 4 to calculate the adjustment factor for volume (0.25).