Does anyone know how options on a company that is merging with another company are usually handled? I'm trading options on GSF and am looking at some longer term LEAPS than the Jan 08's I have now. GSF is scheduled to merge with RIG by the end of this year and I don't want to pay for time on the 09 LEAPS if the GSF options will be worthless on the new merged company and I will have to either execute them or sell them for cash at the time of the merger. I assume the price of the options would only be the instrinsic value at that time since there would be no time value on an option for the nonexistent GSF. The stock arrangement is $26 plus 1/2 share of the new company for each share of GSF. I don't know how that plays out with options.