Good Evening All,
I was hoping someone might be able to clarify this for me.
I am endeavoring to learn a thing or two about how options work. I have been tracking some option prices for charts I thought looked interesting. One such chart was NCM at the close on Sept 7. I decided to track NCMB9 a 2600 call with 27/9 and NCMBM a 2500 call with expiry 27/9. I reckon perhaps I could have bought both on Sept 10 for around 0.345 and 0.675 respectively (this is based on course of sale information that day). The next day NCM went into a trading halt as it sought to raise funds.
When NCM came back on board yesterday the strike prices had been adjusted for NCMBM to 2311 and NCMB9 to 2404. Today NCMBM had a last sale at 3.20 and NCMB9 at 2.46. Have I missed something in thinking that had I actually bought say 1,000 options of each my 1,000 parcel of options would be that much in the money?
I presume that the changed strike price reflects the new shares NCM issued. If anyone could explain this to me and confirm (or blow apart) the above open profit assumption I would be most grateful.