InvestorQ : What happens to options when there are corporate actions?
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Arya Nanda made post

What happens to options when there are corporate actions?

Answer
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Archita Jajjoo answered.
2 years ago


The basis for any adjustment for corporate actions shall be such that the value of the position of the market participants, on the cum-and-ex-dates for the corporate action, shall continue to remain the same as far as possible. This will facilitate in retaining the relative status of positions viz. in-the-money, at-the-money and out-of-money. This will also address issues related to exercise and assignments.