Calculate how stock splits affect your holdings, option contracts, and portfolio value. Analyze historical post-split performance to make informed investment decisions.
Calculate the effects of stock splits on your shares and options
Enter your stock details and split information to calculate the impact on your position, including any options contracts you may hold.
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Our calculator helps you analyze all aspects of stock splits and their impact on your investments
Instantly calculate how any split ratio (2:1, 3:1, 5:1, etc.) affects your shares, per-share price, and total position value.
Analyze how stock splits affect your options contracts, including adjustments to strike prices, contract quantities, and overall option value.
Review how stocks have historically performed after splits, with data on average price movement for 30, 90, 180 days and 1 year post-split.
Understand the tax consequences of stock splits, including cost basis adjustments and how splits affect capital gains calculations.
Access historical stock split information for thousands of companies, including dates, ratios, and pre/post-split price data.
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Understanding the mechanics and implications of stock splits
A stock split is a corporate action in which a company divides its existing shares into multiple shares. While the number of shares outstanding increases, the total dollar value of the shares remains the same because the split does not change the company's value.
| Split Ratio | Original Shares | New Shares | Price Effect |
|---|---|---|---|
| 2-for-1 | 100 | 200 | Price halved |
| 3-for-1 | 100 | 300 | Price reduced to ⅓ |
| 4-for-1 | 100 | 400 | Price reduced to ¼ |
| 5-for-1 | 100 | 500 | Price reduced to ⅕ |
| 7-for-1 | 100 | 700 | Price reduced to 1/7 |
| 10-for-1 | 100 | 1,000 | Price reduced to 1/10 |
Companies typically implement stock splits for several strategic reasons:
Making shares more accessible to small retail investors by lowering the price per share
More shares outstanding and lower prices typically lead to higher trading volume and improved liquidity
Attracting more diverse investors by reducing the entry price of shares
Often seen as a positive signal that management expects continued growth
Makes employee stock option programs more attractive and accessible
Everything you need to know about stock splits and our calculator
No, a stock split does not directly increase the value of your investment. When a stock splits, the number of shares increases, but the price per share decreases proportionally, keeping the total value of your investment the same.
For example, if you own 10 shares at $100 each ($1,000 total) and the stock undergoes a 2-for-1 split, you'll own 20 shares at $50 each (still $1,000 total). However, some studies suggest that stocks may perform well after splits due to increased accessibility and liquidity.
Stock splits are not taxable events. Your cost basis per share is adjusted proportionally to reflect the split ratio, keeping your total cost basis unchanged.
For example, if you purchased 100 shares at $50 per share (total cost basis of $5,000) and later the stock has a 2-for-1 split, your adjusted cost basis becomes $25 per share for 200 shares (still $5,000 total).
This adjustment ensures that when you eventually sell your shares, the capital gains or losses are calculated correctly. The holding period for determining whether gains are short-term or long-term also remains unchanged by the split.
When a stock undergoes a split, options contracts are adjusted to maintain their economic value:
The Options Clearing Corporation (OCC) handles these adjustments automatically. The total value and risk exposure of your options position should remain approximately the same before and after the split, though there may be minor differences due to rounding.
A reverse stock split is the opposite of a regular stock split. It reduces the number of outstanding shares and increases the share price proportionally.
For example, in a 1-for-10 reverse split, an investor who owned 1,000 shares at $1 each would end up with 100 shares at $10 each. The total value remains $1,000.
Companies typically implement reverse splits to increase their stock price when it has fallen too low, often to meet minimum price requirements for continued listing on exchanges or to attract institutional investors who may have restrictions on purchasing low-priced stocks. Unlike regular splits, reverse splits are often viewed less favorably by the market as they may signal financial distress.
No, you typically don't need to take any action when a stock you own undergoes a split. The process is handled automatically by your brokerage firm:
While no action is required, it's a good practice to verify that your holdings have been correctly adjusted after the split takes effect, particularly for any standing orders like limit orders which may need to be manually updated to reflect the new price levels.
Our calculator accounts for fractional shares that may result from certain split ratios:
When a split ratio doesn't divide evenly into your share count, the calculator will show the exact fractional result. For example, if you own 10 shares and there's a 3-for-2 split, you'd end up with 15 shares.
However, it's important to note that the handling of fractional shares in actual stock splits varies by brokerage:
The calculator assumes your brokerage supports fractional shares, but you should check with your specific broker about their policy for handling fractional shares resulting from stock splits.
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