Can someone explain a non-standard option that I mistakening sold. Sold 10 PUT Contracts on CIEN for Jan 09. Strike price is $5 for 3.90 a contract. I received $3,900. Unfortunately I didn't notice the option was non-standard until after the option was filled. Can someone explain this: +ZJBMA | $7.99 cash in lieu of shares, 14 shares of CIEN I'm not sure how to interpret $7.99 cash in lieu of 14 shares of CIEN. In a normal case I would not start to lose money until Ciena dropped to $1.10 but I'm not sure with this non-standard option. Thanks
When they the reverse split occurred, the contract adjustment resulted in 14 point something shares being required for delivery (14.??). The $7.99 represents the cash in lieu of the fractional shares not in lieu of 14 shares. IOW, this adjusted contract now represents 14 shares plus $7.99 You can get the specifics from the CBOE web site. Do a search on your option symbol and it should bring up the terms of the adjustment.