Tag: StrikePriceAdjustment

Introduction: Investors in the world of options trading must not only keep a keen eye on market movements but also on corporate actions, which can significantly affect the value of their investments. Corporate actions like stock splits, dividends, and mergers, can result in adjustments to the strike prices of options. Understanding these adjustments is crucial for investors to manage their portfolios effectively. The Mechanics of Strike Price Adjustments: Strike prices are modified in response to corporate actions to maintain the economic value of the options. This ensures that the option holders are...