Ok, I bought this Jan 2020 ATM Leap put on UVXY, which, as all sellers of short volatility know, has a long history of reverse splits. Current estimates are for it to go four for one or five for on in reverse sometime this fall; its current price is about 9.5 and my LEAP is a little OTM. So, when it splits I get, what quarter or a fifth of a leap, liquidity disappears, and I hold until expiration? If so, what do I do then? I expect the LEAP, unless there is an unusually prolonged period of volatility, to be in the money at expiration. Do I just request an exercise with IB on the last day of trading and collect the intrinsic value, even though there is no liquidity at all? Is this what the OCC and counter-parties are for? Have I answered all my questions already? If so, are there any caveats?
%% Is that a good trender?? Havent seen the chart, looks like a good short+ ''long history of reverse splits''Adios amigos, hit the bids sell it-time is not your friend-even though i havent done a study on that. FIRST i heard of of OCC bailing out a bad trend/trade but could be?? C did a reverse split + that is one of the worst bank stocks, but good credit card division if one like credit cards
It's a well known short trade, some short the ETFs, although I have heard a few buy the Leap puts, which prompted my question.