Reverse Stock Arbitrage (RSA) exploits broker rounding policies during reverse stock splits to generate low-risk profits with minimal capital. One share can become instant profit.
Most trading strategies require capital, risk tolerance, or deep technical knowledge; but not this one.
Reverse Stock Arbitrage (RSA) is a little-known tactic that lets traders earn consistent, almost risk-free profits from reverse stock splits, often with just a single share.
If you’ve never heard of RSA, you’re not alone—but by the end of this guide, you’ll understand why this overlooked stock split strategy deserves a place in your toolkit.
How it works: Buy 1 share before the split, get 1 full new share after due to rounding—profit instantly
Best brokers: Robinhood, Webull, Public, SoFi, dSPAC (each with different quirks)
Requirements: Only 1 share per brokerage account needed, multiple accounts recommended for higher gains
Risk level: Low cost per play, but account bans possible if strategy is abused
What Is a Reverse Stock Split?
A reverse stock split is a corporate action where a company consolidates its existing shares into fewer, higher-priced shares. For example, in a 1-for-25 reverse split, 25 old shares are merged into 1 new share.
The overall value of the company doesn’t change, but the price per share increases, and the number of shares in circulation decreases.
This is often done to prevent delisting from exchanges like Nasdaq or the NYSE, which require stocks to trade above $1.00. Reverse splits may also aim to attract institutional investors or restructure a company’s capitalization.
However, they’re often seen as a sign of distress—used by companies whose share prices have dropped significantly.
Also known as: stock consolidation, share rollback, or stock merge.
What Is Reverse Stock Arbitrage (RSA)?
RSA is a clever strategy that takes advantage of how some brokers handle fractional shares during a reverse stock split.
When a reverse split happens, you might end up with a fraction of a share (like 1/25 of a new share). Some brokers will round that fraction up to 1 full share.
This rounding becomes profit. If you bought 1 share at $0.80, and the split is 1-for-25, your share becomes 1/25 of a new one—but your broker might round it up to 1 full share now worth ~$20. That’s an instant 24x return on a low-risk $0.80 buy-in.
RSA represents an alternative approach to traditional investing. While many investors focus on diversifying beyond savings accounts, RSA offers a unique, tactical opportunity for those willing to learn broker mechanics.
RSA vs Traditional Arbitrage
Unlike classic arbitrage (which involves buying an asset in one market and selling it in another), RSA is based entirely on internal broker mechanics and corporate events.
There’s no spread to exploit—just a one-time price jump created by rounding behavior.
Needs significant capital and speed
Multiple simultaneous transactions
Low entry cost with planning
Single transaction per account
RSA is best viewed as a tactical loophole—low risk, low entry cost, but limited per account.
Which Brokers Support RSA?
Here’s what I’ve learned personally using RSA with various platforms:
App-only. Monthly fee possible. Can delay split reflection.
SoFi Invest ⚠️
Few RSA opportunities. Good interface and next-day selling.
Schwab ⚠️
Blocks some splits. Up to $1,000 bonus for new users.
How to Execute an RSA Play
Step 2: Buy 1 share of the stock before the effective date
Step 3: Wait for the corporate action to process
Step 4: Check if the share was rounded up. If so, sell for profit
Tip: Many advanced traders use spreadsheets or Google Sheets to track accounts and pending splits across brokers.
Hypothetical RSA Play Examples
Split Ratio: 1-for-50
Old Price: $0.20
New Price: $10.00
Profit: $9.80
Split Ratio: 1-for-25
Old Price: $0.80
New Price: $20.00
Profit: $19.20
Keep in mind, these results are PER ACCOUNT.
Risks, Bans, and My Advice
• Don’t contact support asking about rounding
• Don’t open 50+ accounts with one broker—this gets flagged
• Spread out accounts across brokers (4–10 is reasonable)
• Don’t withdraw too often. Withdraw monthly at most if doing this at scale
Want to Try RSA Yourself?
Use a Chase Business Card to earn rewards on funding transfers and brokerage activity.
Frequently Asked Questions About RSA Trading
RSA (Reverse Stock Arbitrage) offers a unique opportunity to profit from broker rounding policies during reverse stock splits. While not guaranteed, it provides:
✓ Low-risk entry (often under $1 per play)
✓ High profit potential (10x-50x returns possible)
✓ Minimal time investment once set up
✓ Works across multiple broker accounts
Ready to start? Begin with Robinhood for the easiest experience, then expand to Webull and Public for multiple opportunities.
Thanks for reading!
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About The Author
Nikolas V.
Deviate Solutions LLC
With a background in computer science, digital marketing, business development, and even day trading, I’ve been chasing entrepreneurship and generational wealth since a young age. I’ve tried just about everything: building computers, selling computers — building websites, selling websites; you get the idea. Now I simplify the unknown to help readers like you think differently about technology, your future or present business, and your finances. All of it is built on real experience and plenty of trial and error. Failure’s part of the game. Let’s learn to win together.
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