Nope! :)
If you hold options on a stock that is subsequently merged, sold, spun off, etc., for either stock or cash, your options will be adjusted to reflect either stock in the new company, cash, or some combination of both. You aren't left holding the bag.
The CBOE has a nice section on education of how options work. Anyone considering buying or selling options should read it.
See this section for options on equities,
cboe.com
Here's the relevant excerpt on merged or acquired companies:
Events other than distributions may also result in adjustments. If all of the outstanding shares of an
underlying security are acquired in a merger or consolidation, outstanding options will as a general
rule be adjusted to require delivery of the cash, securities, or other property payable to holders of
the underlying security as a result of the acquisition.
EXAMPLE: If XYZ is acquired by PQR in a merger where each holder of XYZ stock receives
$50 plus 1/2 share of PQR stock for each share of XYZ stock held, XYZ options might be
adjusted to call for the delivery of $5,000 in cash and 50 shares of PQR stock instead of 100
shares of XYZ stock
mike maxton |
