Learn the stock market › Read a stock chart › Lesson 5 of 6
Splits and dividends in the chart
A split
On Jun 10, 2024 Nvidia split its stock 10:1: each share became ten. The days around the split:
| Date | Price that traded | In today's chart |
|---|---|---|
| Jun 6, 2024 | $1,209.98 | $120.65 |
| Jun 7, 2024 | $1,208.88 | $120.54 |
| Jun 10, 2024 | $121.79 | $121.44 |
| Jun 11, 2024 | $120.91 | $120.58 |
The day before, Jun 7, 2024, the stock traded at $1,208.88. On the first day of the split it traded at $121.79. No owner lost anything, because everyone now had ten times as many shares. But a line through the prices that traded would show a 90% fall in one day.
So every price before the split is divided by 10. $1,208.88 divided by 10 is $120.89. That today's chart shows $120.54 for that day comes from the dividends paid since, which the next section explains. What a split is: What is a stock split?; how prices did after splits: the stock split study.
Dividends
When a company pays a dividend, the price falls by about the same amount on the ex-dividend date, and Why does a stock fall on the ex-dividend date? shows it on real days. A chart of only the prices that traded would show a small fall each time, although the owners got the money. So every price before each ex-dividend date is lowered by the same share of the price that the dividend was.
Over many years that adds up. JPMorgan Chase has made 40 payments in ten years, $39.47 a share in total:
| What | Price |
|---|---|
| Closed on Nov 7, 2016 | $69.84 |
| Same day in today's chart | $53.85 |
| Closed on Nov 6, 2026 | $334.49 |
| Price alone | +379% |
| The chart's change | +521% |
On Nov 7, 2016 the stock traded at $69.84, but today's chart shows $53.85 for that day, 23% lower. The price alone moved +379%. The chart shows +521%, because it counts as if each dividend bought more shares. How the return splits between price and dividends is in How do you make money from stocks?.
What it means when you read a chart
An adjusted chart shows how an owner did who reinvested the dividends. That is what you want when comparing returns, for example between two stocks.
A price you remember, or one printed in an old newspaper, can differ from the chart. Both are right: one is the price that day, the other the same day recalculated.
An index such as the S&P 500 is calculated without dividends, so it is not lowered this way. That is why such an index does worse than a stock with the same price moves that also pays dividends.
Test yourself
A chart shows $50 for a day five years ago, but you bought the stock for $60 that day. What is most likely?
How the price has moved: the Nvidia page.