Create Reverse Stock Split

Introduction

A Reverse Stock Split is a corporate action in which a company reduces the number of its outstanding shares by consolidating them into a smaller number of higher-value shares. The company’s total market capitalization remains unchanged, while the per-share price increases proportionally. Reverse stock splits are often used to meet exchange listing requirements, enhance perceived share value, or consolidate low-priced shares.

On the platform, Reverse Stock Splits can be created and managed by specifying the split ratio, handling fractional shares and applying optional price adjustments, ensuring accurate portfolio and instrument valuation.

🔗 Learn here the difference between Stock Split & Reverse Stock Split.

Corporate actions are not supported for Private instruments.

Permission Requirements

Tab / Feature	Permission Levels
Instruments	View, Modify, Create
Corporate Actions (On Instruments)	View, Modify, Create
Corporate Action (On Orders)	View, Modify, Create

Key Terminologies

Term (A-Z)	Description
Action Date	The date when the corporate action becomes effective.
Adjustment Days	The number of days before the Action Date for which historical prices should be adjusted.
Announcement Date	The date when the corporate action is announced to the public or shareholders.
Compensation Price	The price at which fractional shares will be compensated, if applicable.
Corporate Action	An event initiated by a company that affects its securities (e.g., ticker change, stock split).
Corporate Action Type	Defines if the action is Mandatory (applies to all holders) or Voluntary (requires holder decision).
Current Instrument	The existing instrument (old ticker) before the corporate action.
Fraction Handling Method	The method used to deal with fractional shares resulting from the corporate action. Options include: ROUND_UP: Rounding up fractional shares to the next whole number. CASH_COMPENSATION: Compensation for fractional shares in cash. RETAIN_FRACTIONAL_SHARES: Retaining the fractional shares. ROUND_DOWN: Rounding down fractional shares to the previous whole number.
Instrument	A financial asset like a stock, identified by its ticker symbol or ISIN.
New Instrument	The new instrument (new ticker) replacing the current one.
Price Adjustment	Adjusts the historical price of the original instrument from the Action Date using the adjustment coefficient.
Price Adjustment Factor	A coefficient used to adjust historical prices of the instrument from the Action Date to reflect the impact of the corporate action.
Ratio From	The original ratio of shares before the corporate action. For example, the number of shares held before a stock split.
Ratio To	The new ratio of shares after the corporate action is completed.

👉 New to some terms? Check our full Platform Glossary for quick definitions.

Create Reverse Stock Split

Before you can apply a corporate action to an Order, you must first create the corporate action under the Instrument. Once created, it will appear for selection when creating or updating relevant orders.

Go to Instruments tab > Find Corporate Actions tab.
Click + icon to Create New Corporate Action.

A window opens, choose the Corporate Action Type.
Search/Select Reverse Stock Split.
Then, click on Create + button.

🔗 Learn here on how to create Stock Split.

A form opens where you can input the mandatory(*) field details.

Key Fields Here:

Field	Description
Action Type	Choose whether the corporate action is Mandatory or Voluntary.
Action Date	Enter the date when the corporate action takes effect.
Announcement Date	Enter the date the corporate action was announced.
Instrument	Select the existing ticker symbol affected by the corporate action.
Ratio From	Enter the original quantity or share ratio before the action.
Ratio To	Enter the new quantity or share ratio after the action.
Fraction Handling Method	Choose how fractional shares are handled: `ROUND_UP`, `ROUND_DOWN`, `CASH_COMPENSATION`, or `RETAIN_FRACTIONAL_SHARES`.
Price Adjustment	Enable or disable automatic price adjustment for the instrument.
Price Adjustment Factor	Enter the factor used to adjust the price if price adjustment is enabled.
Adjustment Days	Enter the number of days over which the price adjustment applies.
Description	Add any relevant notes or additional information about the action.

Review the reverse split ratio, effective date and instrument selected.
Then, click Create to finalize the record or Close to discard the changes.

Check the portfolio or instrument summary to confirm the new number of shares and the updated stock price. This should reflect the correct post-reverse split data.

Check Corporate Actions on Instruments

Go to the Corporate Actions tab Dashboard under Instruments.

You can filter the results by Instrument ID, Type, etc to narrow down the search.

Double-click to open the created entry on table or Edit the created entry > Update.

Corporate actions Stock Split and Reverse Stock Split are now related with Split order.

Find it under: Transactions > Order tab > Create New Order > Select Split