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How to read an OCC information memo

An OCC information memo tells you exactly how an option contract changes after a split, merger or spin-off. Five lines do most of the work: the effective date, the new symbol, the strike divisor, the multiplier and the new deliverable. Here's how to read each one.

Options guide · 8-minute read · Updated 2026-10-28

What an OCC memo is

The OCC (the Options Clearing Corporation) stands behind every listed US stock option. When a company does something that changes its shares, like a split, a merger or a spin-off, the OCC decides how the options change. It publishes that decision in an information memo.

The memo is the source of truth for your contract. Your broker's screen, a news story or a forum post may be late or wrong. The memo isn't.

Where to find it: the OCC website has an information memo search. Type the stock's symbol and look for a memo dated near the event. Exchanges often repost the same memo, and many brokers send a notice that links to it.

A made-up memo to practise on

Real memos follow a similar layout, though the exact field names vary. This one is invented for teaching. XYZ is not a real company, and the memo number and date are made up.

INFORMATION MEMO #00000   (made-up example)
Subject: XYZ Corp. - 1-for-10 Reverse Split
Option Symbol: XYZ
New Symbol: XYZ1
Date: Effective June 1, 20XX

Contract Adjustment
  Effective Date:          Opening of business, June 1, 20XX
  Option Symbol:           XYZ changes to XYZ1
  Strike Divisor:          1
  Contracts Multiplier:    1
  New Multiplier:          100
  New Deliverable
  Per Contract:            10 XYZ Corp. (new) common shares
  Pricing:                 The underlying price for XYZ1
                           will be 0.10 x the price of XYZ

Background
  XYZ Corp. shareholders will receive 1 new share
  for every 10 shares held.

The fields, one by one

The pattern is the same in every memo. The deliverable and the pricing line tell you what the contract is really worth. The strike and the multiplier tell you what it costs to exercise.

Putting the memo to work (hypothetical)

Here's a made-up trade, an illustration, not a trade idea.

Before the split, XYZ traded at $5. You sold one cash-secured Put option with a $5 strike for $0.50. You collected $50 and set aside $500.

After the split, XYZ trades at $45. On your screen, a $5 put on a $45 stock looks worthless. It isn't. Use the memo:

• Your contract delivers 10 shares. At $45, that's $450.
• If you're assigned, you pay the strike × the multiplier: $5 × 100 = $500.
• So the put is in the money by $50, not far out of it.

Here's every outcome at expiry, using the memo's pricing line:

Without the memo, you'd have read this trade completely wrong. That's why sellers check it first.

Other lines you'll see

Not every memo has the same fields. A few more come up often:

• Cash in the deliverable. In a cash-and-stock merger, the deliverable might read "50 shares of ABC plus $500 cash". Add both to value the contract. My page on the cash-and-stock merger deliverable works one out.
• Two or more stocks. In a spin-off, the deliverable lists the parent shares and the new company's shares. See options in a spin-off.
• Cash in lieu of fractional shares. When a ratio leaves part of a share, the memo says it's paid as cash instead.
• Delayed settlement. Sometimes part of the deliverable isn't known yet, like a cash amount still being worked out. Exercises may then settle later than usual.
• Strike changes. For a large special dividend, the memo may lower every strike by the dividend. See a special dividend hit my covered call.
• Closing-only or accelerated expiry. In some buyouts and delistings, the memo or the exchange may say new positions can't be opened, or that options expire early.

What to do after you read it

1. Write down the new deliverable and the pricing line. Keep them next to your trade.
2. Value the contract with the memo's numbers, not the stock price on its own.
3. Check your broker's screen against the memo. If they don't match, call the broker.
4. Decide whether to close. Adjusted contracts trade thinly. Most sellers close them and, if they still want the trade, open a fresh one on the standard contract.

In the wheel strategy, you only want to be assigned on terms you understand. The memo is how you know them. For a map of every event, see corporate actions and your options, and for why the symbol changed, see why an option symbol ends in a 1.

Questions