Stock Split and Options

Discussion in 'Options' started by insaneinvestor, Aug 9, 2007.

  1. When a stock splits what happens to the ITM options that will no longer be ITM after the split? (calls)

    How would buying OTM puts work on this? (Prolly too good to be true) but have to ask. . .
  2. The options adjust with the split

    If you own 1 $100 Call and the stock splits 2:1 you will now own 2 $50 Calls.

    You will have the same exact posiiton before the split as you did after the split so if it was ITM pre, it will be ITM after.
  3. cool!