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Corporate Actions: An Overview

Managing a Position

Corporate actions like mergers, stock splits, spin-offs, and bankruptcies are common in today’s financial markets—but they can significantly affect the underlying securities and their related options contracts.

In this video, we provide a high-level overview of how corporate actions may impact listed options.

(0:12) Corporate Actions Defined & Examples
(1:25) Adjustments Made to Options Contracts
(1:50) Contract Adjustment Information Memos
(2:20) How to Recognize an Adjusted Option Contract
(2:43) Example: 'Non-Ordinary' Dividend
(3:24) Example: Traditional Stock Split

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