A split is a corporate action in which a company's existing shares are divided into multiple shares. Although the number of shares outstanding increases by a specific multiple, the total dollar value of the shares remains the same compared to pre-split amounts.
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Step 3: Preview the results to view all open positions on the action date and click save.
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Option Split
When completing a stock split for a symbol, if there are any options with the same underlying symbol, the tool will populate preview entries for themthose options also.
Logic used for option split entries:
- A new option symbol is created with the strike price adjusted by split ratio
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- Quantity multiplied by split ratio
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- Avg Price divided by split ratio
Example of AAPL 4-1 split on 2020-08-28 :
1 contract of +of AAPL210115C00370000 (Apple Jan 15, 2021 $370 Call) at $1 average price,
4 contracts of +AAPL210115C00092500 (Apple Jan 15, 2021 $92.50 Call) at new average price of $0.25
Important: The logic above should be appropriate for the WHOLE ratio option splits (5 for 1, 4 for 1, etc), but the generated entries may NOT be correct for ODD ODD ratios split ratios (3 for 2, 5 for 4, etc). In those cases, you'll need to review the official OCC directions to see how they handle the option split, and adjust the entries accordingly.
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