Earlier this year I purchased 1 DDD 60 Jan 14 call option for a premium of 13. At the time I bought it this option it was ITM; I didn't purchase this as a trade but with the plan of holding it over time and perhaps exercising it at expiration.
When DDD split this option was converted in my account to 1 1/2 of the 40 Jan 14.
At the time I could see that the price being displayed in my positions windows was incorrect. My broker told me to just check the price on the order ticket--that was the correct value.
The price of DDD collapsed then, but now it has recovered and is trading near 40, the strike price of my option. For awhile, in the last trading session, my option was ITM.
I checked the order ticket to see the value, expecting to see that I had at last broken even -- only to find that the value displayed was 1/2 less than what I originally paid for it.
Since it is a LEAPs option, I would not expect time decay to have reduced the value this much. But I am new to options and this is the only one I've held which was affected by a split in the underlying, so I am unclear about what is happening here.
I would appreciate some feedback from board members, especially if anyone detects a mistake, so I have a better knowledge of how to approach the problem if I need to contact my broker.
Thanks for your help.
When DDD split this option was converted in my account to 1 1/2 of the 40 Jan 14.
At the time I could see that the price being displayed in my positions windows was incorrect. My broker told me to just check the price on the order ticket--that was the correct value.
The price of DDD collapsed then, but now it has recovered and is trading near 40, the strike price of my option. For awhile, in the last trading session, my option was ITM.
I checked the order ticket to see the value, expecting to see that I had at last broken even -- only to find that the value displayed was 1/2 less than what I originally paid for it.
Since it is a LEAPs option, I would not expect time decay to have reduced the value this much. But I am new to options and this is the only one I've held which was affected by a split in the underlying, so I am unclear about what is happening here.
I would appreciate some feedback from board members, especially if anyone detects a mistake, so I have a better knowledge of how to approach the problem if I need to contact my broker.
Thanks for your help.
