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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: BelowTheCrowd who wrote (25000)	10/7/1998 5:05:00 PM
From: Mike Maxton	Read Replies (2) \| Respond to of 70976

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