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What is split in Libertex account?
What is split in Libertex account?
Updated over a week ago

Split (or splitting) is a procedure corporations perform to increase the number of shares in a company and to make them more affordable to clients and traders.

So, when splitting 10 to 1, the number of shares increases 10 (ten) times, and the price of one share decreases ten-fold. At the same time, the company's capitalisation remains the same, while the historical price chart is adjusted to reflect the new rate.

For example:

On 22 January 2014, MasterCard Inc did a 10-1 split. The price of MasterCard shares at that time was hovering at around $830. After the split, the price of each share decreased ten-fold to $83, while the number of shares increased 10 times. So, instead of having one share, each holder received 10 without affecting the company's total value.

The price chart in all information sources was adjusted accordingly, and historical rates had their value divided by 10.

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

For example:

If you open a trade for MasterCard Inc at $800 per share with a volume 100 Euros and a multiplier of 50, the financial result at $830 per share is about 187.50 Euro in profit. After the split, the share price is $83, not $830. That means the trade's opening price will be $80 instead of $800.

Note that the change in share price during a split is technical in nature; it does not reflect a change in the real price of the asset. As such, it's not possible to make a profit or loss through this procedure.

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