Rolling Options After a Reverse Split

Discussion in 'Options' started by robertSt, Mar 19, 2021.

  1. robertSt

    robertSt

    UVXY is probably close to declaring a reverse split, some predict 5:1. Will I be able to roll option positions from the old, pre-split underlying into the new, current series?

    This article thinks yes: "New options will be generated with newly reverse split UVXY as the underlying, but the old adjusted options will hang around until they expire. In general, if you’re hoping to sell your options at some point rather than just letting them expire it’s probably a good idea to roll your options into the current series after the split. A combo order closing out the old position with an opening order in the new series is probably the best approach."
    UVXY’s Next Reverse Split? My Estimate: July 13th, 2021 (sixfigureinvesting.com)

    Do those in the know think this is correct?
     
  2. Justrade

    Justrade

    Yes
    When the split happens your strike price will be a multiple of 5
    6.50 will be 32.5
    7 will be 35
     
  3. ajacobson

    ajacobson

    Taxable or retire account. If it's taxable you might not want to roll.