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Finance

What Happens to Options in a Merger?

Owning an option in a company is different than owning stock. Whereas stock gives you ownership of a piece of a company, an option is a contract that allows you to buy or sell the stock at a specific price and date. Each option is worth 100 shares. 

As the option buyer, you set the price, or strike price, that you want the option to reach by its expiration date. If the strike price is higher than the market value, then it’s a call option. If it’s lower than market value, it’s a put option. You also set the expiration date, aiming for a date when the stock hits its strike price. 

View more information: https://marketrealist.com/p/what-happens-to-options-in-a-merger/

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