What Happens to Put Options if the Company Is Bought Out?
- zman492Lv 71 month ago
The option contracts are adjusted to require delivery of the same thing the owner of 100 shares of the company received if the option is exercised.
I had a put ratio spread on CompUSA stock when it went private paying $10.10 per share for owners of CompUSA stock. The options were converted to cash settled options. If I had exercised my long options I would have had to pay $1,010 for each option I exercised. If I had been assigned on my short options I would have received $1,010 for each option contract.
For a more complicated adjustment see