I havce a few RINO puts, at $5 so they are now OTM. Im sure that if stocks get delisted 8 dec, then they will become ITM. But how do I trade my options on a delisted security? Is it even tradable?
RINO delisted, what happens to my put options?
- Thread starter failed_trad3r
- Start date
If the stock is delisted from option trading but still trades,usually, they do not add new series of options but trading continues in existing options out to the farthest month in which there is current open interest. If the stock is delisted from trading then it's worthless and puts are worth parity.
I have no clue what's going on with RINO so the best answer is to contact the CBOE or OCC before your puts expire and find out the specifics of the delisting and how they are handling it. If there isn't automatic exercise (cash settlement), then contact your broker and finalize it.
I have no clue what's going on with RINO so the best answer is to contact the CBOE or OCC before your puts expire and find out the specifics of the delisting and how they are handling it. If there isn't automatic exercise (cash settlement), then contact your broker and finalize it.
Sorry but a delisting does not mean the shares are worthless. It just goes to another exchange.
ie SAYCY.PK
So I'd be careful about exercising those puts. Company value is still very much unknown. I'm not confident that they didn't contest the delisting, but on the other hand the CFO did the filing (which means he is still showing up for work) yesterday, and 70% of ownership of the company is in Zou's hands. The outcome will be interesting for sure.
(and remember, the halt occurred after the 8-K came out concerning admission of the 2 bad contracts. So that news is in the stock to -some- extent.)
ie SAYCY.PK
So I'd be careful about exercising those puts. Company value is still very much unknown. I'm not confident that they didn't contest the delisting, but on the other hand the CFO did the filing (which means he is still showing up for work) yesterday, and 70% of ownership of the company is in Zou's hands. The outcome will be interesting for sure.
(and remember, the halt occurred after the 8-K came out concerning admission of the 2 bad contracts. So that news is in the stock to -some- extent.)
so if shares get delisted, options get delisted too? except you can still trade in them? I hope there is enough of a market to get rid of my puts then.
At least, this case is interesting learning experiment. First time ever I've owned options in a delisted stock.
At least, this case is interesting learning experiment. First time ever I've owned options in a delisted stock.
Maybe able to request an exercise and your broker will pair off with an in house account.
A stock can be delisted to the pink sheets because of not meeting listing requirements. Just because it has gone to the pink sheets doesn't mean that it's worthless or trades for pennies. The key to all of this is after delisting, what are the shares trading for and if ITM, what are your puts worth?
As a put holder, you have the right to put (sell) the shares to the seller. If there's a fair market in the options, close the position. If not, hypothetically, if your shares are worth 8 cts after delisting as you speculated in your original post, then you can buy 100 shares (assuming standard 100 sahre contract) times the number of puts owned and exercise your puts.
Again I repeat, call the OCC or the CBOE and determine the specifics after delisting rather than taking anyone's word here.
Quote from zdreg:
an interesting question is how the exchanges will handle the options with a november expiration.
" I hope there is enough of a market to get rid of my puts then. ".
i think those november puts have become worthless even if ITM, unless you told your broker to exercise before expiration deadline.
I've requested info from the OCC and they told me something like that would happen. They did told me "in general" so it might be different for a certain stock.
So u guys should be happy I took your advice. What will happen is I either exercise, or not. If I do exercise, I will get short the stock. Then I need to cover by trading the stock on the pink sheets. If the stock is not available, then ????? they said "hopefully the stock will be tradable". In which case, if the stock ISNT, nobody can close their stock position. (unless ofcourse your broker has 2 stock traders one long one short so that evens out they can net it if both traders agree.
If I don't exercise, but want to sell on the open market, the option can only be closed. No new positions can be opened. Which means, liquidity will be crap! Wide-bid-ask to close out an option position. WHich means exercising might be more prudent, in case there's actually a stock to trade on the pink sheets.
In any case, I sure do hope theirs a market on 8 dec! 5 days left!:eek: If not then I will cry!
Which leads me to another question. How do I exercise an option with trader Workstation?
Just to complicate things, have a go at this:
OCC memo #27391
http://www.optionsclearing.com/components/docs/market-data/infomemos/2010/jun/27391.pdf
DATE: JUNE 15, 2010
SUBJECT: REVIEW OF TRADING HALT PROCESSING
Rule 805 provides that if an underlying security is not traded on the last trading day before expiration, OCC may either (i) fix a closing price on such basis as it deems appropriate (including using the last sales price from the most recent trading day for which a last sales price is available); or (ii) determine not to fix a closing price for that security, in which case clearing members may exercise by only giving OCC affirmative instructions.
In conjunction with its assessment of the methodology used to select closing prices for expiration processing (see Information Memo #26849), OCC also assessed its policy on fixing closing prices for underlying securities in which trading has been halted. After consulting with its clearing members, OCC has determined to establish the following policy:
- If OCC becomes aware at any time on or before expiration Monday that trading in an underlying security has been halted, and if trading does not resume before expiration, OCC will not apply exercise by exception (ex by ex) procedures with respect to options on that security.
- If OCC does not become aware until expiration Tuesday or thereafter that trading in an underlying security has been halted, and if trading does not resume before expiration, ex by ex procedures will apply and OCC will fix a closing prices on such basis as it deems appropriate in the circumstances (including, without limitation, using the last sales price from the most recent trading day for which a last sales price is available).
- If OCC becomes aware before the close of trading on expiration Friday that trading in a previously halted underlying security has resumed, ex by ex procedures will apply and OCC will fix a closing price for that security in the normal manner. If ex by ex processing procedures are suspended for an underlying security, any expiring long positions that a Clearing Member wishes to exercise on expiration Saturday must be entered manually via the Ex by Ex Instruction entry screen in ENCORE.
OCC will notify Clearing Members of any issues removed from ex by ex through information memos and Member Radar.
DISCLAIMER
This Information Memo provides an unofficial summary of the terms of corporate events affecting listed options or futures prepared for the convenience of market participants. OCC accepts no responsibility for the accuracy or completeness of the summary, particularly for information which may be relevant to investment decisions. Option or futures investors should independently ascertain and evaluate all information concerning this corporate event(s).
The determination to adjust options and the nature of any adjustment is made by a panel of The OCC Securities Committee pursuant to OCC By-Laws, Article VI, Sections 11 and 11A. The adjustment panel is comprised of representatives from OCC and each exchange which trades the affected option. The determination to adjust futures and the nature of any adjustment is made by OCC pursuant to OCC By-Laws, Article XII, Sections 3, 4, or 4A, as applicable. For both options and futures, each adjustment decision is made on a case by case basis. Adjustment decisions are based on information available at the time and are subject to change as additional information becomes available or if there are material changes to the terms of the corporate event(s) occasioning the adjustment.
For questions regarding this memo, call 1-888-OPTIONS or email options@theocc.com.
OCC memo #27391
http://www.optionsclearing.com/components/docs/market-data/infomemos/2010/jun/27391.pdf
DATE: JUNE 15, 2010
SUBJECT: REVIEW OF TRADING HALT PROCESSING
Rule 805 provides that if an underlying security is not traded on the last trading day before expiration, OCC may either (i) fix a closing price on such basis as it deems appropriate (including using the last sales price from the most recent trading day for which a last sales price is available); or (ii) determine not to fix a closing price for that security, in which case clearing members may exercise by only giving OCC affirmative instructions.
In conjunction with its assessment of the methodology used to select closing prices for expiration processing (see Information Memo #26849), OCC also assessed its policy on fixing closing prices for underlying securities in which trading has been halted. After consulting with its clearing members, OCC has determined to establish the following policy:
- If OCC becomes aware at any time on or before expiration Monday that trading in an underlying security has been halted, and if trading does not resume before expiration, OCC will not apply exercise by exception (ex by ex) procedures with respect to options on that security.
- If OCC does not become aware until expiration Tuesday or thereafter that trading in an underlying security has been halted, and if trading does not resume before expiration, ex by ex procedures will apply and OCC will fix a closing prices on such basis as it deems appropriate in the circumstances (including, without limitation, using the last sales price from the most recent trading day for which a last sales price is available).
- If OCC becomes aware before the close of trading on expiration Friday that trading in a previously halted underlying security has resumed, ex by ex procedures will apply and OCC will fix a closing price for that security in the normal manner. If ex by ex processing procedures are suspended for an underlying security, any expiring long positions that a Clearing Member wishes to exercise on expiration Saturday must be entered manually via the Ex by Ex Instruction entry screen in ENCORE.
OCC will notify Clearing Members of any issues removed from ex by ex through information memos and Member Radar.
DISCLAIMER
This Information Memo provides an unofficial summary of the terms of corporate events affecting listed options or futures prepared for the convenience of market participants. OCC accepts no responsibility for the accuracy or completeness of the summary, particularly for information which may be relevant to investment decisions. Option or futures investors should independently ascertain and evaluate all information concerning this corporate event(s).
The determination to adjust options and the nature of any adjustment is made by a panel of The OCC Securities Committee pursuant to OCC By-Laws, Article VI, Sections 11 and 11A. The adjustment panel is comprised of representatives from OCC and each exchange which trades the affected option. The determination to adjust futures and the nature of any adjustment is made by OCC pursuant to OCC By-Laws, Article XII, Sections 3, 4, or 4A, as applicable. For both options and futures, each adjustment decision is made on a case by case basis. Adjustment decisions are based on information available at the time and are subject to change as additional information becomes available or if there are material changes to the terms of the corporate event(s) occasioning the adjustment.
For questions regarding this memo, call 1-888-OPTIONS or email options@theocc.com.