Knightshade
Well-Known Member
Mentioned in other thread but seemed relevant here so quoting it here to see if folks have any thoughts
That's a fugly ratio for those dabbling in options. What happens to the 500 or 1000 strike options? In case of a split like 1:5, they can slice the strike price by 5 and increase the count by 5 and it works out.
Now it's not so clean. If they create a basket, like what they did with SCTY options, that will be even worse. In these cases, they will create a TSLA1 basket comprised of 3 post split TSLA shares and your old options will be on TSLA1 which then become pretty illiquid.
Sucking out liquidity like this is not generally great. And the market makers make out like bandits when making market in these illiquid chains.
There is still a big inventory of leaps going out to June '24.
Ugh..