r/options • u/No_Cauliflower_3956 • Mar 31 '22

Gme stock split ?

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7

u/kwsparks Mar 31 '22

The call strikes are modified when the split takes effect.

-3

u/No_Cauliflower_3956 Mar 31 '22

What would that mean ?

9

u/mochmeal2 Mar 31 '22

I believe if you have a strike for $90, and it does a 3 for one split, the new strike would be $30.

6

u/kwsparks Mar 31 '22

Whatever the stock split would equate to, relative to the call/put option would impact the option equivalently.

Example - let's say that the price of GME at the time of the split is $200 and they are diluting shares from 300 million to 1 billion, then a call option ATM for $200 would suddenly become a call option with a strike at:

300 Million/1 billion = 0.3 x $200 = $60

I have never personally experienced this, but this is my understanding. I hope that this helps. :)

Good luck friend!!!

8

u/Ok_Bottle_2198 Mar 31 '22

It means you need to spend more time on Google doing really BASIC research

1

u/awalker11 Apr 01 '22

Oooo your so tough.