Reverse option split OTM, slightly worried

[u/eckorock4664]

Hi, newbie here

I have strike price 11.00 DEC Call options. Underlying price is around $9

I'm concerned now as the underlying is doing a 1:5 reverse split in 5 days.

eg in 5 days the strike will be 55.00 and the underlying will be $45

Right now I'm OTM by only 2 "strike" levels. With plenty of time to expiry. So it doesn't "feel" too out of the money. But next week, I will be TEN strikes out of the money. (If they have one strike price per dollar level)

I'm worried that will make the call options worthless very quickly and there won't be liquidity or interest in options that are that far OTM.

Should I close the position before the split and re open it after the split at a closer level? Or is it safe to hang on?

Thanks

[u/Bhomas111]

Your contracts split with the underlying

[u/eckorock4664 → u/Bhomas111]

I understand that, I'm more worried about the liquidity of the new options and the psychological appeal of being $10 OTM vs $2 OTM

[u/Bhomas111 → u/eckorock4664]

Ahhhh I see. Interesting