Reverse Split Strike Calculations

Discussion in 'Options' started by PokerPlayer, May 13, 2020.

  1. Hi All,

    Regarding USO - I am struggling to understand the calculation for the non-standard options to determine the ITM point with the current price. I have a complex position I am unwinding with the nonstandard options at $2.50 calls (12/100 $8.18).

    Given the 1-8 reverse split, $2.50 *100 / 12 = $20.833 as the equivalent strike price I thought I was tracking. However it is currently trading $20.70 and still shows that non standard $2.50 call as in the money. Can anyone elaborate on what I am missing?

    Thx
     
  2. ajacobson

    ajacobson

    OCC memo was posted on the site a week or so back.
     
  3. Thank you for the reference. I've got it now.
     
  4. guru

    guru

    Look at USO1 options chain:
    upload_2020-5-13_10-34-30.png