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Reverse Stock Splits: Understanding Contract Adjustments

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 […]

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covered call writing and stock splits

Stock Splits Can Cause Panic: Relax, All is Well

You write a covered call on a stock trading at $165.00 and sell the $170.00 call option. A few days later, your stock is trading at $28.00 and the strike you sold no longer appears on option chains. What do we do? Panic? Curl up into the fetal position and feel sorry for ourselves? Research […]

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