> For the complete documentation index, see [llms.txt](https://docs.punch.win/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.punch.win/trading/trading/split-merge.md).

# Split & Merge

Split and Merge enable direct conversion between trading currency and Shares.

{% hint style="info" %}
Split and Merge are powered by a **Conditional Token Framework (CTF)**: direct conversion between collateral and Share pairs, with no orderbook fees.
{% endhint %}

***

## Split

Divides trading currency into **Yes Shares + No Shares** (or Up + Down Shares).

### Conversion Formula

```
$1 → 1 Yes Share + 1 No Share (only one side settles at $1.00.)
```

### Example

Splitting $100 yields:

* 100 Yes Shares + 100 No Shares
* Fee: None

### Use Cases

* **Hedge / Arbitrage**: Split to hold both sides, then sell at favorable prices. Useful for hedging or capturing arbitrage spreads when Yes + No > $1.000
* **Provide Liquidity**: Place Limit Orders on both sides to earn Maker Rebate

***

## Merge

Combines **Yes Shares + No Shares** (or Up + Down Shares) back into trading currency.

### Conversion Formula

```
1 Yes Share + 1 No Share → $1
```

### Example

Merging 100 Yes Shares + 100 No Shares yields:

* $100
* Fee: None

### Constraints

* Must hold **equal quantities** of Yes and No (or Up and Down) Shares
* Maximum Merge quantity = `min(Yes Shares, No Shares)`

### Use Cases

* **Position Exit**: Convert Shares on both sides into trading currency instantly without the Orderbook
* **Arbitrage**: Buy both sides on the market for a combined price below $1.000, then Merge to capture the spread

***

## Split vs Merge Comparison

| Field       | Split                            | Merge                                |
| ----------- | -------------------------------- | ------------------------------------ |
| Direction   | Currency → Shares                | Shares → Currency                    |
| Input       | Amount (integer)                 | Shares quantity (integer)            |
| Output      | Yes + No Shares (equal quantity) | Currency                             |
| Fee         | None                             | None                                 |
| Requirement | Sufficient balance               | Equal quantity of Yes/No Shares held |