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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: mc who wrote (7053)	3/7/1998 5:15:00 PM
From: Marc D.	Read Replies (1) \| Respond to of 14162

Thanks for your response, Gary. The numbers I used were a little too round. I've seen split adjusted strike prices, but I've never seen merger/buyout adjusted ones, so let me try again. Suppose the buyout is .23 shares of ABC for each XYZ and I had 100 XYZ. So I now have 23 shares of ABC (still trading at $100) with an adjusted strike price of $43.48? This doesn't make any sense to me. The options exchanges change the contract size and create unique strikes just for this situation? If this were the case, I'd still see odd strike prices for long term COMS options after the USRX merger last year (the first example that came to mind). What am I missing? Thanks, Marc