From The Contingency Market

A split describes the directions and relative proportions of each of three transactions that occur in a deal.

Negative amounts are transferred from the agent making the offer to the agent accepting it, and positive amounts in the other direction.

There are three points at which amounts may be transferred:

1. the instant the deal is accepted by both agents,
2. the instant the contingency succeeds, and
3. the instant it fails.

If A is the amount of funds settled on for the deal, and d,s,f the directional weights of the split then the following amounts are transferred:

• On deal: A*d/(|d|+|s|+|f|)
• On success: A*s/(|d|+|s|+|f|)
• On failure: A*f/(|d|+|s|+|f|)

A split is acceptable in any proportion, i.e. 'A' may vary from 0 to fundlimit.

A more advantageous split is also always acceptable, which means that there is no positive limit on any component.