Good Morning, Just had a quick question to ask , which is...... Say that I own 100 Long Calls on IBM stock , and IBM comes out and does a 3:1 stock split , during the time that I still own my 100 Calls on the stock . When this happens on a stock that you own Options on .... Would I then own 300 Calls on IBM ( but at a price that is 1/3 the Value that these Calls were worth, at the time the Split occurred ) ? This is likely a Newbie question, but in all honesty ... I have no clue as to the answer lol Thanks for th help
The OCC will determine how it will be handled. You might get 300 call options with 1/3 the strike price or you might have 100 call options that deliver 300 shares each at the current strike price. Either way, you won't be materially impacted - (there are some vega impacts with special dividends and spinoffs, but that's options level 301). You can go to the OCC website where they put out notices on adjustments to option deliverables.