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It is when a company divides its shares a stock split is when the company holding the stock decides to cut the face value of its stock by a particular % and correspondingly increase the number of stocks in circulation in the market. A 2 for 1 stock split refers to a corporate action by a stock company wherein the face value of a stock is cut in half and after the action date, there will be twice the number of shares of that company in the market. Say for ex: XYZ limited has 1 million stocks in the market with each of face value $10, after the split there will be a total of 2 million stocks in the market of the same company each with a face value of $5. This is done for a variety of reasons. The stocks price on the current face value might have gone too high and is affecting its trading volumes or the company wants to do it for any other tactical reason.

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