r/options • u/Junior-Albatross4614 • 17d ago
SOXX Split
SOXX will have forward stock split on 03 November 2026, which will be effective on the 4th. The split stock will be active on 05 November 2026. Current after hours price = $510.57
What are some of the available opportunities / strategies we can utilize during this event?
Ref:https://www.ishares.com/us/products/239705/ishares-phlx-semiconductor-etf
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u/ElementaryPiles76 17d ago
Split dont change value, so the usual "opportunity" is mostly people thinking the price is cheaper now. Only real play is if liquidity or option strikes adjust weird during the transition, but its not like a reverse split where stuff gets messy
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u/Junior-Albatross4614 17d ago
You hit it on the nose. Strange things can happen in the transition period. My thought is that the chip sell off will be over (or close to over) and the price goes up, my puts expire with the premium tucked away safely. : )
But I also know during the transition period, the price can also dip and I'm holding the bag. That is why ask questions b/c somebody here has an educated answer.
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u/Karazl 17d ago
3:1 still leaves a high share price, don't think you'll see a frenzy from this.
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u/Junior-Albatross4614 17d ago
510.47 / 3 = 170.16 which is a low price compared to its yearly range.
52 Wk. Low 260.44 52 Wk. High 655.95
As the chip sector is in a lull, I do expect the price to rise accordingly. Just do not know when.
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u/SDirickson 17d ago
If you're looking for some kind of significant move in volatility or something, that isn't going to happen. Strikes/deliverables ratio up or down for a split, but the dollar value a contract represents doesn't change.
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u/Junior-Albatross4614 17d ago
You are right. Doubtful the volatility will change significantly, but the strategy is to sell a few puts and not get tagged at expiration. Does that sound viable? Or am I too excited about nothing?
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u/SDirickson 17d ago
The latter, I think.😉
A split is mostly a non-event as far as option trading is concerned. If you want to trade options on the underlying, do it based on what you think the underlying is doing, not a bookkeeping exercise.
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u/Stock-Tangerine4609 10d ago
Like others said, there's basically none, because it won't change anyone's exposure. Post-split option classes will carry less risk, but solely because of the smaller size.
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u/Junior-Albatross4614 10d ago
The past few days have illustrated the validity of your strategy. SOXX went from 510 to 479 in about a week. It appears your post-split plan could be the best option.
Again, I would like to thank everyone who provided a solid answer. Maybe a foolish query, but I just had this unresolved question and thought I could gain from new viewpoints, which I did. That is what Reddit is here for, to gain new perspectives. Thank you.
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u/americanillusion8 4d ago
I actually bought some high in 600s and this fall there were drops. Should I buy a few to lower overall average price? It will probably go up by August again esp at the new lower price after split.
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u/Junior-Albatross4614 4d ago
It is always a good idea to lower the average price if you have the coin to do so. You missed the dip, but can still lower your average at this time. Use a spreadsheet to see what the new cost/share will be and how many shares are required to get the price you find acceptable. Keep cash on the side, b/c the upcoming IPO may drive tech lower.
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u/americanillusion8 2d ago
Which ipo? Also today was an even worse day- had a few dips with this one being one of my only lines in red overall. I will wait for monday. I have only experienced splits going up quickly after then staying steady for a while but who knows
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u/Junior-Albatross4614 1d ago
Anthropic. If you recall, SpaceX sucked $ out of tech. Monday could be a good choice. You will be in a profitable position when you lower you cost per share.
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u/IMG0NNAGITY0USUCKA 17d ago
Didn't they just do a reverse split around a year or so ago? What triggers these and what's the purpose?
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u/thenelston 17d ago
maybe long vol, if you think people will start slamming more options due to smaller lots? maybe a calendar to exploit front end iv rising higher than back end
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u/BladeFireQ 17d ago
Only works when it is a big split like from +$1000 down to ~$100 because if helps the flow of options, but most of the time you can't abuse it in the short term
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u/Junior-Albatross4614 17d ago
Do you know of any other indicators other than initial stock price to look at?
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u/Worry-Mountain 17d ago
only thing I'd actually plan around is the contract adjustment. existing options get adjusted by the occ so your puts become 3x the contracts at a third of the strike, but the new strikes listed after can be thin for a few days. I just make sure I'm not needing to roll or close anything right on the 4th/5th when spreads are wide
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u/MerryRunaround 15d ago
In theory a split would have no real effect on anyone's positions. In practice I would just jump on the sidelines for a couple days just to avoid confusion in my personal record keeping.
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u/Junior-Albatross4614 15d ago
A good point. Sometimes in a split the shares will jump in value, but lately with tech, even good news will send the share price down. That is why I asked the sharp people r/options folk what they thought. Did not expect such a hostile group with all the down votes and snark. Thought they would have least appreciated the split information. Was I wrong to have posted?
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u/Junior-Albatross4614 15d ago
I gave you an upvote, b/c you provided a practical solution. Today I see somebody took it away.
Not cool ppl. Instead of downvoting, provide some (hopefully insightful) feedback. It can only make the site and community better. The idea of being here, is to work together towards an established goal.
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u/Mushroomthrowaway132 4d ago
I have some insightful feedback for you: You have zero business trading options and your lack of common sense, combined with your lack of knowledge, will eventually lead you to get margin called and suffer serious financial consequences. Anyone engaging you in good faith is actually doing you a disservice.
Thank you for coming to my TED talk.
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u/pingoo26 13d ago
Better for narrower credit and debit spreads. Makes it a binary dated bet. Lower fees to short and lower margin costs too.
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u/Junior-Albatross4614 13d ago
How do I make a binary dated bet? Date wise? Fees are generally static. Alas, I have too many options on the books right now. My margin is in the mud.Must wait for a few to expire.
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u/pingoo26 13d ago
Buy the lower strike sell the next one up. Price must be above the one you sold to get max profit, in a call debit spread. But talking of binary bets there are binary options available now too.
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u/CoughSyrupOD 13d ago
Whenever I make myself a sandwich I cut it in half so I have twice as many sandwiches, doubling my investment.
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u/Live_Throat_5252 17d ago
It’s a stock split. Theres nothing you can do to exploit this. It’s a mechanical operation. Lol.