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What is a reverse stock split?

A reverse stock split, also known as a stock consolidation or share rollback, is when a company decreases the number of its shares by a specific multiple.

The most common split ratios are 1:2 and 1:5 (one-for-two and one-for-five). The second number in the ratio is the value the shares will be divided by.

At XM, reverse stock splits are treated the same as on the actual stock exchange. Your position size is adjusted based on the split ratio, leaving the total value of your position unaffected. So, if a 1:2 reverse stock split happened, and you were holding 100 shares, after the split you’d have 50.

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