Can someone explain to me how a reverse stock split would effect call options? I have 30 $5.00 Jan 08 calls. thank you
The same prayer would still be used for the split shares. No change. Seriously, I would think if it went , 1 for 10, you would then have 3 Jan 50 calls.
OPWV did a reverse and it actually worked buying it! JDSU may be too overowned, and in this environment, I would be hesitant to buy it right after. No position either way as of now
A split won't adjust any actual value. But it makes it more appealing to institutions that don't allow for buying anything under ten or five/share. Any split will affect options by giving all sorts of screwy strikes until all the leaps have expired. For reference check out all the strikes for FDG and CWTR who have both split relatively recently(not reverse). ERICY reverse split about a year or three ago with some success. I believe LOOK did as well but with no real benefit to shareholders.