Versions Compared

Key

  • This line was added.
  • This line was removed.
  • Formatting was changed.

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. 

...

Example of AAPL 4-1 split on 2020-08-28 : 

1 contract of AAPL210115C00370000 (Apple Jan 15, 2021 $370 Call) at $1 average price

becomes...

4 contracts of AAPL210115C00092500 (Apple Jan 15, 2021 $92.50 Call) at new average price of $0.25


(warning) 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 ratios split (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.

...