Pursuant to OCC Rule 807, equity stock option contracts whose deliverables are adjusted to call for cash only delivery will be subject to an acceleration of the expiration dates for outstanding option series. (See OCC Information Memo 23707) Additionally, the exercise by exception (ex by ex) threshold for expiring series will be $.01 in all account types.
So what does this mean? 1: The expiration date is changed/accellerated to the effective date of the plan, when the shares become worthless. 2: Since the shares now do not exist because they were cancelled, the option contract becomes 'cash only' and a cash settlement contract. 3: Call options now have a value of zero, for any exercise price, since there is no shares delivered.
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