Option with underlying split
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Posted by Chris ß on August 07, 2005 at 11:58:23:
Hi Mark, 1st, just a 1 liner to THANK YOU for the GREAT Support .If I sold a naked PUT on an equity that later split, the option incurs a distribution to reflect the new number of Puts. So, I sell 10 PUTS, the underlying splits 2 for 1, so my origianl sale of 10 PUTS goes to 20 PUTS. What is the best way for FM to handle this? TIA for your patience and help. Maybe your reply could be included in the Options FAQ page. Obviously, I'm doing my 2004 taxes! based on an extension.... -= Chris ß =-
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