Option contracts can be standard or adjusted. Certain corporate events may change standard option contracts to adjusted contracts. These events include stock splits, mergers, acquisitions, special dividends, spin-offs and reverse splits. After these events, options are altered to reflect these changes and make buyers and sellers of options whole. This article will focus in on […]

Anatomy of a Reverse Stock Split
Posted on October 10, 2020 by Alan Ellman in Fundamental Analysis, Investment Basics, Option Trading Basics, Stock Option Strategies

Reverse Stock Splits: Understanding Contract Adjustments
Posted on May 30, 2020 by Alan Ellman in Fundamental Analysis, Investment Basics, Option Trading Basics, Options Trade Execution, Stock Investing, Stock Option Strategies
Contract adjustments to the terms of our covered call writing and put-selling options are due to corporate actions like mergers and acquisitions, special dividends and stock splits. This article will highlight the contract alterations resulting from a reverse stock split. What is a reverse stock split? This is a reduction in the number of […]

Reverse Splits and Unreliable Options Chains
Posted on December 23, 2016 by Alan Ellman in Investment Basics, Option Trading Basics, Stock Option Strategies, Stock Trading & Taxes
Stock splits are corporate events where the number of shares in circulation changes as well as the price -per-share. If we own 100 shares at $50.00 per share pre-split and the stock splits 2-for-1, then we will own 200 shares at $25.00 post-split. The value of our position ($5000.00) does not change. What is […]
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