Consider an exchange-traded put option to sell 200 shares for $60 per share (strike price) for company ABC. Suppose the company ABC announces a 3 for 2 stock split, answer the following questions.
 (a) What is the new strike price after the stock split ?
 (b) What is the number of shares that can be sold after the stock split ?

Answer rating: 100% (QA)

To determine the new strike price and the number of shares that can be sold after the stock split well first understand the impact of a 3 for 2 stock split A 3 for 2 stock split means that for every 2 shares of company ABC owned before the split the shareholder will receive an additional 1 share Essentially the total number of shares increases by 50 a To find the new strike price after the stock split we ... View the full answer