A stock split occurs when a company divides one higher-priced share into several lower-priced shares without changing the total value of your investment.
As a result, you end up with more shares at a lower price per share, but your total investment value stays the same.
Why do companies split their stock?
Companies typically perform stock splits to:
Make shares more affordable for individual investors
Increase market liquidity by making more shares available
Attract more traders and improve overall market interest
Example of a stock split
Suppose you own 5 shares of Tesla (TSLA) worth $1,000 each. Your total position value is $5,000.
If the company executes a 10-for-1 split:
Before the split: 5 shares at $1,000 each = $5,000
After the split: 50 shares (5 x 10) at $100 each = $5,000
Your total position value remains exactly the same. Only the number of shares and the price per share change.
What happens to price charts?
When a split occurs, historical price charts across all information sources are automatically adjusted and recalculated to reflect the new price structure. This prevents artificial price drops from appearing on the chart and ensures technical analysis remains accurate.
How does a stock split affect your position?
On your Libertex account:
You will see automatic adjustments to your position's opening price and volume.
A stock split is a purely technical adjustment, meaning you do not gain or lose money from the split itself.