Hi folks, I need your help with an Option related question. I used to own 400 shares of Sprint (before Softbank) and had written/sold 4 contracts of Jan 2014 $4.50 Call option. However, due to the Sprint-Softbank deal, my position got sliced up and I'm left with the following: 52 shares of the new Sprint and 2 non-standard contracts of 26 shares each [S 26/100 (US$ 566.1) JAN 14 4.5 CALL]. I do not want to wait until Jan 2014 and would like to get out of the position. I tried to buy back the Call, but it looks like my broker wants me to pay for 2 standard contracts (of 100 shares each) instead of 2 non-standard contracts (of 26 shares each). With bid/ask at 2.85/2.91 and last sale at 2.97, here's what I expected to pay to buy back the 2 non-standard contracts: 52 * 2.97 = $ 154.44 But when I try to place the order, here's what my broker wants me to pay: 200 * 2.97 = $ 594.00 Am I missing something? Please advise. Thank you. Regards, SK.
Your description is somewhat confusing. But I think this should clear things up. With the merger of Sprint with SoftBank the New Deliverable Per Contract: 1) 26 (New) Sprint Corp. (S) shares 2) Cash in lieu of .1744048 fractional S shares (or $1.33) 3) $564.77 Cash ($5.647658 x 100) The contract multiplier remains 100 So... 26 shares of S @ 6.48 = 168.48 + $566.10 Cash = 734.58, divided by 100 7.35 The adjusted 4.50 calls @ this current price are $2.85 in-the-money. What's confusing is if you had 400 shares and 4 short calls what you should have after the adjustment is 104 shares and short 4 adjusted call contracts. More detailed information can be found on OCC Infomemo #33024 & #33095