What is a stock split?
A stock split is when a company decides to split one high-priced share into several lower-priced shares—without changing the total value of your investment.
So, you’ll end up with more shares at a lower price, but your total investment stays the same.
Why do companies do this?
Companies typically do stock splits to:
💡 Make shares more affordable to smaller investors
📈 Increase liquidity (more shares in the market)
🤝 Attract more traders and improve market perception
Simple example: TSLA
Let’s say on March 31, you own 5 shares of TSLA, each worth $1,000. Your total holding is $5,000.
The company announces a 10:1 split effective April 1, meaning you’ll get 10 shares for every 1 you own.
🔄 After the split:
You now hold 50 shares (5 x 10)
The new price per share is $100
Total investment remains $5,000
✅ Your value stays the same—only the number of shares and price per share change.
What happens to the chart?
When a split happens, all price charts are automatically adjusted to reflect the change. Historical prices are recalculated as if the new split price had always existed—so the chart remains accurate and smooth.
How does this look in Libertex?
On your Libertex account:
You’ll see changes in the opening price and volume of your position.
A stock split is a technical adjustment, not a trading opportunity:
👉 You don’t gain or lose money from the split itself.
Real-world example: MasterCard (MA)
📅 On January 22, 2014, MasterCard Inc. completed a 10:1 stock split.
Before the split, the share price was around $830. After, it dropped to $83, and shareholders received 10 shares for each one they previously held.
➡️ So if you had 1 share at $830, after the split, you had 10 shares at $83.
💼 Total value: still $830.
What if you have an open trade?
If you have an active trade during a split, Libertex automatically adjusts your opening price, so your profit/loss stays unchanged.
🧾 Example:
You opened a trade on MA at $800 per share, volume $100, multiplier 50.
If the price went up to $830, your profit was about $187.50.
After the split, the price becomes $83, and your opening price becomes $80.
🎯 Bottom line: Your financial result is the same.
⚠️ Important notes
Keep these in mind:
A split does not affect the total value of your positions.
It’s a technical process, not a trading event.
You cannot gain or lose directly from a stock split.
✅ In summary
What Changes | What Doesn’t Change |
Price per share | Total investment value |
Number of shares | Financial result of open trades |
Adjusted price chart | Company market cap |