Moron here….
I bought long-dated OTM call options on a stock with a strike price of $1.
The stock has subsequently undergone a reverse split (20:1)… the ticker and information on my brokerage app has not changed (it still says $1 call, not $20 call for example)…
Moreover, you can only sell the options now, not buy them… which pretty much makes them worthless even if the stock somehow outperformed now.
Anyone able to provide clarity on what to expect?
Am I just SOL? Is options trading just temporarily suspended for a period of time when a stock undergoes a reverse split?
Thanks!
Posted by RandoPoker123
2 Comments
If you give us the ticker and option you are holding, we can give you better information.
I haven’t looked at this topic for a while, but I don’t think much has changed. If it’s the same, then they will adjust the strike for your options to 20 but they’ll be issued as non-standard options that only represent 5 shares each (1/20 of 100). I thought this would have happened at the same time, but maybe there’s a delay in the process for some reason.
There isn’t much of a market for non-standard options, so you’ll probably have to just sell them for what you can get. Hopefully there’s at least a little bit of market maker competition so that you can get a reasonable price when you exit, but if you traded in size and would lose a lot from liquidity you could look at converting by selling the standard version of that option in an appropriate ratio.