Adjusted option deliverable calculator: what is your contract really worth?
After a merger, spin-off or odd split, one option contract can deliver a mix of shares and cash. Enter the package and the strike — see what it is worth, and whether the option is really in the money.
How it works: after a merger, a spin-off or an odd split, one option contract may no longer deliver 100 shares of one stock. It delivers a package: some shares of one or more companies, plus some cash. The package's value = each security's shares × its price, added up, plus the cash. Exercising one contract still costs the strike × 100. A call is worth something at expiry only if the package is worth more than that; a put only if it is worth less. The gap is the intrinsic value. The per-share equivalent is the package ÷ 100, so you can hold it up against the strike. Fees left out.
Why one share price fools you
The default numbers are a hypothetical deal (an illustration, not a trade idea): XYZ is bought by ABC, and each XYZ share becomes half an ABC share plus $15 cash. So one XYZ 40-strike call now delivers 50 ABC shares and $1,500. ABC trades at 45. That is above 40, so the call looks in the money. It isn't. The package is worth $3,750, and exercising costs $4,000. The call is $250 out of the money, and if nothing changes it expires worth nothing. Whoever bought it at a price that assumed "45 is above 40" loses all of it. The same thing works the other way on a put: a short put that looks safe can be in the money once you price the whole package.
What to check before you touch an adjusted contract
Find the exact package first. Your broker shows it in the contract details, and the exchange publishes a notice for every change. The symbol often gets a number at the end (XYZ1), which tells you the contract is no longer standard. Price every piece, not just the main stock. Then be careful about trading it at all: few people trade adjusted contracts, so the gap between the bid and the ask is often wide. For most people running the wheel strategy, closing the position is cleaner than trying to sell new calls against an odd package. If your stock split while you had a trade open, here is what a split does to the contract, and assignment works the same way on an adjusted contract: you hand over, or receive, the whole package.
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