Shares reassigned

wburt1948

wburt1948

I purchased a total of 50 $9.00 July calls which would, of course, be the right to purchase 5000 shares at that strike price prior to expiration.
With the shares being reassigned due to merger, eTrade explained to me that I now have 50 contracts but each contract is for 45.5 shares rather than the original 100 per contract.
I have not been able to get any information from eTrade regarding whether the original $9 strike call is valid. If it is, I have a tidy profit as the underlying price of the new company is at $12.42.
Does anyone have experience with calls being reassigned and whether the original purchased strike price is or would be still valid?
I looked at the call options for the new company and the listed call options quotes for July don't go below $13.00 despite underlying price being $12.42. This is because the new company (holding) didn't exist prior to the merger.

One last question .... If I allow this to go to expiration, am I correct in that I should expect to see 2275 (50 x 45.5) to show in my portfolio? I am assuming I could then sell the shares with the hope that the price is still close to the $12.42. I understand there's no guarantee. I am just looking for information from those who have dealt with similar circumstances.

Any help appreciated.
 
wburt1948 said:
I purchased a total of 50 $9.00 July calls which would, of course, be the right to purchase 5000 shares at that strike price prior to expiration.
With the shares being reassigned due to merger, eTrade explained to me that I now have 50 contracts but each contract is for 45.5 shares rather than the original 100 per contract.
I have not been able to get any information from eTrade regarding whether the original $9 strike call is valid. If it is, I have a tidy profit as the underlying price of the new company is at $12.42.
Does anyone have experience with calls being reassigned and whether the original purchased strike price is or would be still valid?
I looked at the call options for the new company and the listed call options quotes for July don't go below $13.00 despite underlying price being $12.42. This is because the new company (holding) didn't exist prior to the merger.

One last question .... If I allow this to go to expiration, am I correct in that I should expect to see 2275 (50 x 45.5) to show in my portfolio? I am assuming I could then sell the shares with the hope that the price is still close to the $12.42. I understand there's no guarantee. I am just looking for information from those who have dealt with similar circumstances.

Any help appreciated.
More...

Again, in 10 seconds this question would be answered if you just gave the ticker.
 
OK, I appreciate the reply.
The original option ticker was TIVO and now appears as XPER. Spent about an hour on the phone with eTrade trying to get a straight answer. They looked up the OCC and as best they know, instead of option on 5000 shares, I have option on 2250 due to the merger.
The good news is the the original strike price of $9 is still good and the stock closed at 12.42 Friday. The bad news is, the option price is zero asked, 0.05 bid so to realize any profit, I will need to come up with $20,475 to exercise the option. I can then sell the shares and see about $7800 profit.
Thanks again for your reply. I hope this plays out OK. Would love to see $1100 turn into $7800 in just 30 days since I bought the TIVO options.
 
So here’s what took 10 seconds to figure out. The underlying value of the options is approx $6. That is you are getting (45 shares * 12 dollars/share xper + 6 dollars cash)/100 = 6 dollars.

Your options are still way out of the money.
 
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