An investor has exchange-traded put options to sell 100 shares for $20.There is a 2 for 1 stock split.Which of the following is the position of the investor after the stock split?
A) Put options to sell 100 shares for $20
B) Put options to sell 100 shares for $10
C) Put options to sell 200 shares for $10
D) Put options to sell 200 shares for $20

Question

Quizplus · Accepted Answer

When there is a stock split the number of shares increases and the strike price decreases.In this case,because it is a 2 for 1 stock split,the number of shares doubles and the strike price halves.

An Investor Has Exchange-Traded Put Options to Sell 100 Shares