BHP options post South 32 split - Aussie Stock Forums

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  1. #1

    Default BHP options post South 32 split

    i guess i'm sort of assuming here that the spinoff is going to proceed, and that the BHP stock price is going to fall post split, since the value of the assets backing it will have dropped, but i have no idea how the options are going to be handled.

    will they

    * not be adjusted at all post split? doesn't seem likely, when i checked the market this mng with the stock price around $33, the $33 strike options looked very much as if they were priced like normal ATM options, rather than being priced like a stock that had a $2 (or whatever) div. or is my assumption that the stock price is going to fall post split a bit hasty?
    * adjust the strikes of options that were traded pre split downwards to compensate? this does happen when there are unexpected capital distributions but they know what the size of the distribution is going to be in those cases. there's no set unit price for the new South 32 shares here, so how would they know how much to drop the strikes by? the opening price of South 32? some sort of average?
    * change it so all contracts traded pre split are now over 100 BHP shares + 100 South 32 shares? not sure if this sort of thing has ever been done before or if it's even possible?
    * or do they adjust it some other way?

    anyone got any thoughts on (or actually know) what will happen?

  2. #2

    Default Re: BHP options post South 32 split

    I owned BHP shares pre and post, the One Steel spin off, it didn't make a lot of difference from memory.

    BHP core business doesn't change much, the South 32 should be more nimble and available for sell offs.IMO

    Definitely do your own research. I do hold BHP shares
    Allow for the worst, hope for the best.

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