If your trading options you should know the strike price is what matters nobody can tell you if you’re screwed or not if you don’t include strike price. But to be honest I’m confused on what’s happening as well if holding 5 dollar strike price calls and I think I’m screwed unless it goes past 50 dollars is how that works is what I’m reading
MacroMachines on
I called support. No option to sell the contract itself. Only option is to exercise if contract goes ITM by expiry. Post merger here is what “ITM” means:
**SIRI1 Options = old options for the original SIRI ticker.** But you gotta take your strike and multiply x10 due to merger. So an old SIRI call w/ strike of $2.50 really a strike of $25 post-merger.
Cost to exercise is x10 strike price and exercising gets you 10 shares of new SIRI (not 100).
**SIRI3 Options = old options for LSXMK.** Pretty sure they can only be exercised too and retain the same strike price as before merger. So an old LSXMK call with a strike of $30 dollars becomes a “SIRI3” call with an unchanged strike of $30 (I believe LSXMA options similarly became “SIRI2”).
Cost to exercise is x100 strike price and exercising gets you 83 shares of new SIRI and cash for the leftover fractional share. What threw me off is the rep said new SIRI sp had to be about 20% above the SIRI3 strike to be considered ITM. I know that has something to do with the conversion but I’ve had enough math for this morning.
consciouscreentime on
Reverse splits can be confusing. Don’t panic yet, you need to figure out the new strike price and how many shares your contracts now represent. Check your brokerage account for details on the adjusted options terms and consult resources like [Investopedia](https://www.investopedia.com/terms/r/reversesplit.asp) to understand how reverse splits impact options.
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If your trading options you should know the strike price is what matters nobody can tell you if you’re screwed or not if you don’t include strike price. But to be honest I’m confused on what’s happening as well if holding 5 dollar strike price calls and I think I’m screwed unless it goes past 50 dollars is how that works is what I’m reading
I called support. No option to sell the contract itself. Only option is to exercise if contract goes ITM by expiry. Post merger here is what “ITM” means:
**SIRI1 Options = old options for the original SIRI ticker.** But you gotta take your strike and multiply x10 due to merger. So an old SIRI call w/ strike of $2.50 really a strike of $25 post-merger.
Cost to exercise is x10 strike price and exercising gets you 10 shares of new SIRI (not 100).
**SIRI3 Options = old options for LSXMK.** Pretty sure they can only be exercised too and retain the same strike price as before merger. So an old LSXMK call with a strike of $30 dollars becomes a “SIRI3” call with an unchanged strike of $30 (I believe LSXMA options similarly became “SIRI2”).
Cost to exercise is x100 strike price and exercising gets you 83 shares of new SIRI and cash for the leftover fractional share. What threw me off is the rep said new SIRI sp had to be about 20% above the SIRI3 strike to be considered ITM. I know that has something to do with the conversion but I’ve had enough math for this morning.
Reverse splits can be confusing. Don’t panic yet, you need to figure out the new strike price and how many shares your contracts now represent. Check your brokerage account for details on the adjusted options terms and consult resources like [Investopedia](https://www.investopedia.com/terms/r/reversesplit.asp) to understand how reverse splits impact options.