How prices are adjusted

A stock split or a bonus issue changes the number of shares outstanding without changing what the company is worth. Without adjusting for it, a chart would show a vertical cliff on the ex-date, and any return calculated across that date would be wrong by the size of the split.

What DocStoX does#

Charts, multi-year returns and technical indicators are computed on adjusted prices: every price before a split or bonus is divided by the cumulative factor of every split and bonus since, so the whole history is expressed in today's share count. Raw, as-traded prices are never changed. The adjustment is derived on top of them, so correcting a factor later automatically corrects every view built from it.

A worked example#

Say a company trades at ₹1,000 the day before a 1:1 bonus (one extra share for every one held). The day after, it opens around ₹500, because the same company is now split across twice as many shares. On an unadjusted chart this looks like the stock fell 50% overnight. DocStoX divides every price before the bonus by the factor of 2, so that ₹1,000 close is shown as ₹500 in the chart, matching the post-bonus price, and the true return across that day reads correctly as flat rather than as a 50% loss.

How a split or bonus is confirmed#

Not every corporate action needs correcting. Much of DocStoX's price history already arrives pre-adjusted from its source, so applying every declared split or bonus factor without checking would over-correct prices that were never off in the first place, inventing a second error in the other direction.

Instead, a declared factor from an exchange filing is only applied once it is confirmed against an actual discontinuity in the price series on or near the ex-date. If a company's own filing gives no usable ratio, DocStoX can infer a factor from a large, otherwise-unexplained overnight price jump, but only when that jump is close to a real-world split or bonus ratio (such as 1:1, 1:2 or 2:5) and large enough that it could not plausibly be ordinary trading. Where neither route can confirm a factor with confidence, no adjustment is applied and the raw price stands, rather than guessing.

Known limits#

• Very recent actions can lag. A split or bonus is picked up once the exchange has filed it and the price discontinuity has actually appeared in the data, so there can be a short delay before very recent corporate actions are reflected in adjusted history.
• Dividends are not included. Adjustment here covers share-count changes only (splits and bonuses). It does not add back dividends, so a return read off an adjusted chart is the price return, not the total return including dividends.
• As-traded prices stay available. Anywhere DocStoX shows a historical price, the raw, unadjusted print is what was actually printed on the exchange that day, for reconciling against a contract note or a past order.

See Technicals for where adjusted prices feed indicators, and Calendars for upcoming and past corporate actions.