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What is Split?

Split (or splitting) is a procedure performed by corporations to increase the number of shares in a company, as well as to make them more affordable to clients and traders. Thus, when splitting 10 to 1, the number of shares increases 10 (ten) times, and the price of one share decreases 10 times. At the same time, the company's capitalization remains the same, while the historical price chart is adjusted to reflect the new rate.

For example, on January 22, 2014, MasterCard Inc. split 10 to 1. The price of MasterCard shares at that time was hovering around $ 830. After the split, the price of each share decreased 10 times (to $ 83), but the number of shares increased 10 times. Thus, instead of one share, each holder received 10 and it did not affect the total value of the company.

Accordingly, in all information sources, the price chart was adjusted and created according to historical rates, the value of which was divided by ten.

Please, note that during the Split procedure in the Libertex terminal, the open price in the active trade changes so that the previous financial result for it remains the same.

 

For example, you opened a deal on MasterCard Inc at a price of $ 800 per share with a volume 100 USD and a multipler 50, the financial result at $830 per share was about 187.50 USD profit. After the split, the share price was not $830, but already $83, thus the opening price of the deal will not be $800, but $80.

 

 

In the MT4 terminal in addition to the change in the open price, there is a change in the position volume.

For example, you opened a deal to buy in MT4 terminal with MasterCard Inc at a price of $ 800.00 per share with a volume of 1 lot (100 shares), the financial result at the price of $ 803.00 per share was about 300 usd profit. After the split, the share price was not $803.00, but $80.30, thus the opening price of the trade would not be $800, but $80. However, with a volume of 1 lot, the financial result of a buy deal from 80.00 to 80,3 will be ~30 usd, for this reason in addition to changing the opening price of the deal, the position volume will be increased 10 times, so, the deal would be opened with 10 lots instead of 1.

We draw your attention to the fact that the change in the share price during the split has a technical, and not a trading origin, therefore it is impossible to make a profit or loss according to this procedure.

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