What happens to an option of the underlying is redeemed?

Discussion in 'Options' started by tonyf, Aug 23, 2021.

  1. tonyf

    tonyf

    I am considering selling covered calls on shares that are about to get redeemed. The underlying SPV will collapse and be liquidated when shareholders are paid out all the cash available.

    What would happen to said puts if they were long dated and expire after the liquidation date?
     
  2. qwerty11

    qwerty11

    then the options will get settled against the redemption value...