Tag: strike price adjustments

Introduction:Corporate actions, such as stock splits, mergers, acquisitions, or special dividends, can significantly impact the strike prices of options contracts. Understanding how strike prices are adjusted during corporate events is essential for options traders to accurately assess risk and potential profits. In this article, we will explore the intricacies of strike price adjustments in various corporate actions, providing valuable insights and resources for informed trading decisions. Stock Splits and Reverse Splits:Stock splits occur when a company divides its existing shares into multiple shares, while reverse splits consolidate shares into fewer...