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Shares Per Contract
- Thread starter ess1096
- Start date
These are generally caused by a split or other one-time share adjustment.
They get weirder--some options exercise into a long and a short of two different equities (happened this year to me with a call), or a long and cash.
Be careful, you'll sometimes see options that are "too good to be true", often they include delivery of another company's shares as well.
They get weirder--some options exercise into a long and a short of two different equities (happened this year to me with a call), or a long and cash.
Be careful, you'll sometimes see options that are "too good to be true", often they include delivery of another company's shares as well.
Here are recent contract adjustments:
http://theocc.com/market/infomemos/info_memos_form.jsp
3-2 splits in particular usually result in 150 multiplier and weird strikes like 5/8 (= 0.63) :
http://www.optionsclearing.com/market/infomemos/2006/may/21773.pdf
http://theocc.com/market/infomemos/info_memos_form.jsp
3-2 splits in particular usually result in 150 multiplier and weird strikes like 5/8 (= 0.63) :
http://www.optionsclearing.com/market/infomemos/2006/may/21773.pdf
With whole stock splits (2:1, 3:1, etc), the number of contracts is increased and the strike price is reduced. Therefore, a 2:1 split on a $30 stock results in 2 contracts having a $15 strike (100x1x30 = 100x2x15).
With fractional stock splits (3:2, 5:2, etc), the number of shares covered per contract increases and the strike price is reduced. Therefore, a 3:2 split on a $30 stock results in 1 contract with a $20 strike, covering 150 shares (100x30 = 150x20)
With fractional stock splits (3:2, 5:2, etc), the number of shares covered per contract increases and the strike price is reduced. Therefore, a 3:2 split on a $30 stock results in 1 contract with a $20 strike, covering 150 shares (100x30 = 150x20)