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URL:  https://boards.fool.com/if-the-stock-splits-2-for-1-the-strike-price-of-24873510.aspx

Subject:  Re: LEAPs Date:  11/29/2006  3:11 PM
Author:  RaplhCramden Number:  7702 of 11356

If the stock splits 2-for-1, the strike price of your options will be cut in half. So don't worry.

For example, if you have a LEAP with a strike price of $80, after the split the strike price will be $40. See the following Options Clearing Corporation press release for an example of what happens:


Its even better than that. If you have 100 shares optioned at $80 strike and the stock splits 2 for 1 you will have 200 shares optioned at $40.

In general, any "distribution" of more than (I think the number is) ~10% of the value of the stock results in an adjustment to the option, and is not lost to the option holder. Adjustments smaller than that, mostly routine dividends, ARE lost to the option holder.

R:
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