RSA: The Profitable Trading Strategy You Never Heard Of

Finance, Investments

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.

Real risk-free investing through quantitative research.

Key Takeaways

  • RSA = Reverse Stock Arbitrage
  • Capitalizes on brokers rounding up fractional shares after a reverse stock split.
  • 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 quirks).
  • Requires: 1 share per brokerage account, multiple accounts recommended for higher gains.
  • Risk: Low cost per play, but account bans possible if abused.

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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.

Note: This only works once per account per split. Traders are known to open accounts across multiple brokers.

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.

  • Traditional Arbitrage: Requires real-time price differences across exchanges.
  • RSA: Requires patience, account control, and timing corporate actions.

RSA is best viewed as a tactical loophole—low risk, low entry cost, but limited per account.

Traditional arbitrage needs capital and speed; RSA just needs planning.

Which Brokers Support RSA? (Based on My Experience)

Here’s what I’ve learned personally using RSA with various platforms:

BrokerRSA SupportNotes
Robinhood✅Easiest to use. 10–15 day delay to sell.
Webull✅Requires 100 shares for <$1 stocks. Use cash account. Keep ~$100 minimum.
Public✅Simple UI. $20 deposit. Next-day selling supported.
dSPAC✅App-only. Monthly fee possible. Works but can delay split reflection.
SoFi Invest⚠️ LimitedFew RSA opportunities. Good interface and next-day selling.
Schwab⚠️ LimitedBlocks some splits. Up to $1,000 bonus for new users.

How to Execute an RSA Play

  1. Track upcoming reverse splits using broker tools or stock split calendars.
  2. Buy 1 share of the stock before the effective date.
  3. Wait for the corporate action to process.
  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

TickerSplit RatioOld PriceNew PriceProfit
$XYZ1-for-50$0.20$10.00$9.80
$LMN1-for-25$0.80$20.00$19.20

Keep in mind, these results are PER ACCOUNT.

Risks, Bans, and My Advise

  • 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?

What is Reverse Stock Arbitrage (RSA)?
Reverse Stock Arbitrage (RSA) is a trading strategy where you buy a single share of a stock that is undergoing a reverse split. Some brokers round up the resulting fractional share to a full one—creating an opportunity for instant profit. It’s a low-cost, low-risk tactic when executed properly.
Is Reverse Stock Arbitrage legal and allowed by brokers?
Yes, RSA is legal. It leverages normal corporate actions and brokerage policies. However, brokers are not required to round up fractional shares—and excessive activity or abuse (like opening 50+ accounts) may violate their terms and lead to bans. Always proceed with caution and respect platform rules.
How much money can you make with RSA?
Profits vary by split ratio and stock price. A 1-for-50 split could turn a $0.20 share into a new share worth $10–$15 after rounding. Some traders with 20–30 accounts have made $500–$1,000+ from a single play. However, most individual plays yield $5–$20 per account.
What happens if the broker doesn’t round up the fractional share?
If rounding doesn’t happen, most brokers will return your cost as Cash in Lieu (CIL). That means you lose no significant money—just the opportunity for profit. Always expect CIL as the worst-case scenario.
Which brokers work best for RSA in 2025?
Based on experience, the top RSA-friendly brokers are Robinhood, Webull, Public, and dSPAC. Each has unique rules: Webull requires buying 100 shares for penny stocks, while Robinhood delays selling by up to 15 days. Public is fast but charges a small fee. See our broker breakdown for full details.
How do I track upcoming reverse stock splits?
Use stock split calendars, screener tools like Webull, or market news platforms. Some RSA communities also offer alerts via Discord or Telegram. Staying informed is key to catching plays early.
Can I use the same account more than once for RSA?
You can only perform RSA once per account, per split. After a split processes, you’ll need to wait for a new opportunity or use a different account. That’s why experienced traders operate with 3–30+ brokerage accounts.
Is RSA worth it if I only have a few accounts?
Yes. Even with 2–5 accounts, RSA can yield small but meaningful gains. It’s low risk, low capital, and works well when compounded across multiple plays. Just ensure you’re using brokers that support fractional rounding.
Are there risks to using RSA?
The main risks include: brokers not rounding up, delays in selling, or getting banned for suspicious activity (like frequent withdrawals or too many accounts). Stick to the guide, spread out activity, and never contact brokers about RSA to avoid problems.
Do I owe taxes on RSA profits?
Yes. If you profit from an RSA play in a taxable account, it’s considered a short-term capital gain. Keep track of your trades and consult a tax professional if you’re unsure about how to report them.

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