SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Options
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: edamo who wrote (886)1/10/2000 1:36:00 PM
From: Eylon  Read Replies (2) of 8096
 
Option question for the experts in this thread.

The AOL/TWX deal bring up a very interesting situation with regards to option on TWX.

If I buy TWX 2001 80 leaps what happens when AOL and TWX become one company. I can think of two radically different scenarios. Let assume that just before the deal is done AOL price is still 75 and TWX is at 112.5. After the deal the new company stock price is 75 and TWX owners get 50% more stocks.

Just before the deal I have an option for TWX that is 32.5 ITM (112.5 - 80).

After the deal:

1) If my new option is for 2001 80 but each option is for 150 shares I am now 5 OTM (75-80) and my option worth very little.

2) If my option is for 2001 53.333 but I have 1.5 contracts for each old contracts each contract is 21.66 ITM (66% of the value that was a day earlier) I did not lose anything.

The second scenario make more sense but I'm really worried about the first. Does anyone on this thread know how this transition will be treated?

Eylon
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News