E*r
2 楼
thx for the reminder
https://sixfigureinvesting.com/2013/08/next-vxx-reverse-split/
Specifics of the Split
If you hold shares of VXX there isn’t anything to worry about when it
reverse splits. The value of your investment stays the same through the
reverse split process. You just have 4X fewer shares that are worth 4X more
each (assuming a reverse split ratio of 4:1). If your shareholdings are
not a multiple of four, say 215 shares, you will get 53 reverse adjusted
shares and a cash payout for the 3 remaining pre-split shares.
If you are short VXX, same story, no material impact.
If you were holding VXX options (long or short) when the reverse split
occurred there’s still no material impact, however, the option chains are
going to hurt your head for a while. This Options Clearing Corporation
memo describes the adjustments for the August 2017 reverse split. It
adjusts the number of VXX shares per option on the pre-split contract from
the usual 100 to 25. The option strikes are not adjusted and the underlying
symbol that the options trade against is VXX2, a new symbol—which is set
at 25% of VXX’s price. These contortions are required so that holders aren
’t left with fractional contracts–something the options clearing house
doesn’t want to deal with.
So, as an example, let’s say you hold ten pre-split call options on VXX
with an expiration date of September 15th and a strike price of $10. Each
contract was worth around 2.81 ($281) at the close on August 21st (VXX’s
closing price was 12.77) so your overall position value is around $2891.
After the reverse split your contracts are adjusted so each contract has 25
shares of the new reverse split VXX as its deliverable. The strike price, $
10 stays the same, and the effective price of the underlying that the option
is priced against is the current VXX value divided by 4. So, if on
August 24th, right after the reverse split VXX’s price is $51.08 and VXX2’
s price is 12.77. Your options will continue to be worth about $281 each,
and you still own 10 contracts so your position is still worth around $2891.
The only difference is that if you exercise all your contracts you won’t
get 1000 shares of VXX, you’ll get 250 shares.
New options created after the split will be generated with VXX as the
underlying, but the old adjusted options will hang around until they expire.
I’ve seen reports that the liquidity on the adjusted options is not good,
so if you are planning on exiting your options, rather than just letting
them expire you should consider closing out your positions and re-
establishing them after the split.
https://sixfigureinvesting.com/2013/08/next-vxx-reverse-split/
Specifics of the Split
If you hold shares of VXX there isn’t anything to worry about when it
reverse splits. The value of your investment stays the same through the
reverse split process. You just have 4X fewer shares that are worth 4X more
each (assuming a reverse split ratio of 4:1). If your shareholdings are
not a multiple of four, say 215 shares, you will get 53 reverse adjusted
shares and a cash payout for the 3 remaining pre-split shares.
If you are short VXX, same story, no material impact.
If you were holding VXX options (long or short) when the reverse split
occurred there’s still no material impact, however, the option chains are
going to hurt your head for a while. This Options Clearing Corporation
memo describes the adjustments for the August 2017 reverse split. It
adjusts the number of VXX shares per option on the pre-split contract from
the usual 100 to 25. The option strikes are not adjusted and the underlying
symbol that the options trade against is VXX2, a new symbol—which is set
at 25% of VXX’s price. These contortions are required so that holders aren
’t left with fractional contracts–something the options clearing house
doesn’t want to deal with.
So, as an example, let’s say you hold ten pre-split call options on VXX
with an expiration date of September 15th and a strike price of $10. Each
contract was worth around 2.81 ($281) at the close on August 21st (VXX’s
closing price was 12.77) so your overall position value is around $2891.
After the reverse split your contracts are adjusted so each contract has 25
shares of the new reverse split VXX as its deliverable. The strike price, $
10 stays the same, and the effective price of the underlying that the option
is priced against is the current VXX value divided by 4. So, if on
August 24th, right after the reverse split VXX’s price is $51.08 and VXX2’
s price is 12.77. Your options will continue to be worth about $281 each,
and you still own 10 contracts so your position is still worth around $2891.
The only difference is that if you exercise all your contracts you won’t
get 1000 shares of VXX, you’ll get 250 shares.
New options created after the split will be generated with VXX as the
underlying, but the old adjusted options will hang around until they expire.
I’ve seen reports that the liquidity on the adjusted options is not good,
so if you are planning on exiting your options, rather than just letting
them expire you should consider closing out your positions and re-
establishing them after the split.
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