Adjustment of corporate actions for stock options preserves position value across cum and ex dates by modifying strike, lot, or position. Adjustments to exchange traded stock option contracts must preserve the value of the position across cum and ex dates by modifying strike price, position size and/or market lot/multiplier as needed; adjustments occur on the last cum trading day and apply to all open, exercised and assigned positions. Specific formulas govern bonus, split, consolidation and rights issue adjustments; fractional results are managed by rounding strike and lot and reconciling any residual value difference through group determined adjustment so as to avoid forced position closure. Ordinary small dividends are not adjusted; extraordinary dividends are adjusted.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Adjustment of corporate actions for stock options preserves position value across cum and ex dates by modifying strike, lot, or position.
Adjustments to exchange traded stock option contracts must preserve the value of the position across cum and ex dates by modifying strike price, position size and/or market lot/multiplier as needed; adjustments occur on the last cum trading day and apply to all open, exercised and assigned positions. Specific formulas govern bonus, split, consolidation and rights issue adjustments; fractional results are managed by rounding strike and lot and reconciling any residual value difference through group determined adjustment so as to avoid forced position closure. Ordinary small dividends are not adjusted; extraordinary dividends are adjusted.
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