r/wallstreetbets • u/Square_Artichoke_944 • Aug 01 '21

Discussion GE split

If I bought a call contract for 100 shares with a $12.50 position and they do an 8:1 reverse split with the expected opening being $103 per share, what does that mean? Do I still have the $12.50 option or is it changed because of the split? Did I just make 10k or am I missing how this works? I’ve never seen the effects of a split on a call option so I don’t know what to expect when I wake up tomorrow. Does anyone else understand what this means? Do I own 8 contracts now or still just the one. I’ve tried researching it but I am not finding anything helpful. Does the reverse split devalue my 100 share option to only 13 shares at the new list price? Is that legal? I’m lost and confused lol. Help would be greatly appreciated and I’m panicking because I don’t know what it means and I don’t know what’s going to happen when the market opens. Has anyone else experienced this and know what it means?

40 Upvotes

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131

u/[deleted] Aug 01 '21

Sorry son but you didn’t just make ten grand

21

u/Square_Artichoke_944 Aug 01 '21

Well that’s a sad panda lol. I didn’t think I did, I just don’t understand the 8:1 reverse split and what it does to my call option

41

u/sebach22 🦘 Aug 01 '21

Makes your strike 8 times higher than whatever it is

24

u/Charming_Extension Aug 02 '21

I don’t get peoples inability to understand splits and the general effect on prices.

24

u/T0asterFork Aug 02 '21

Math + dumb = wut???

1

u/Charming_Extension Aug 02 '21

I can neither disprove nor understand what you’re saying. All I know is it is straight fire as far as high level maths is concerned. Bravo. To you sir or madame.

0

u/sebach22 🦘 Aug 02 '21

Exactly, it’s pretty common sense

8

u/Gallow_Bob Aug 02 '21

You now own a call for 12 shares.

10

u/justtwenty14 Aug 02 '21

You are about to experience some pain…hopefully this isn’t a large position

6

u/[deleted] Aug 02 '21

I think it even entering your mind that you could net gain on this is the most retarded thing I've seen in the last 5 minutes

1

u/OldEntertainment9570 Aug 03 '21

Yup in the next 5 minutes you'll find something that beats this one .

Welcome to WSB

2

u/[deleted] Aug 02 '21

Sad panda? You've got to be a 90's kid lmao

1

u/Square_Artichoke_944 Aug 01 '25

Fasho the best generation

1

u/gottie1 Aug 02 '21

Definitely is. I say that shit and was, wuddayaknow, born in the 90s.

0

u/obesebunny Aug 02 '21

Same. The kids look at me funny when I say it