Citi options
Hey guys, I was just curious about what happens to an options contract if the common equity of a company were to get wiped out at one point, but then a couple years on out they were to reissue equity.
To clarify, let's say I bought some call option contracts for Citi with an expiration date of Jan 2011. If the gov't were to do something as radical as nationalizing the entire bank, then de-nationalizing 2 years later would my options contract still be valid?
(I haven't bought any Citi options yet, but I was thinking about it. What do you guys think?)
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Is that option available right now?
The January 2011 $2.50 calls are .41x.43 and have an open interest of 29,114.
Not sure what happens to options when a company is nationalized. My best guess, though, is that if the company goes public again it will be considered a new issue and the old options won't be valid. THAT IS JUST A GUESS!
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