Stock splits are not rare, they happen quite often.
In this article, I'm going to try to shed some light on what happens to options when stock is doing a reverse split.
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On March 24, 2020, I bought both call and put ratio back spread options on XOP ETF.
A couple of days later I was…
On April 4th, 2019 I made following put sell - AEG OCT 19'19 5 Put @0.45.
This is already fourth put sell in my short options trader career.
When writing puts I always want to write against stocks I already have or wouldn't mind having. AEG falls into the second category. Almost.
AEG stands for Aegon N.V - multinational life insurance, pensions, and asset management company headquartered in The Hague, Netherlands. As of December 31, 2017, Aegon companies employed approximately 28,318 people worldwide, serving millions of customers.
Here are some impressive stats:
- Assets under management: 817.4 trillion EUR (2017)
- Revenue: 57.91 billion EUR (2017)
- Total assets: 396.3 billion EUR (2017)
AEG currently is trading at $5.02 and has a yearly dividend payout of $0.34 giving a yield of 6.7%.
Got for this trade a premium of $45, but I will be obligated to buy 100 shares of AEG if the price will drop below $5 USD per share by October 19, 2019.
Break-even price: $4.55
This latest trade gives 15.71 % yield annually. In case I will be obligated to buy this stock, I already have collected premium, and my real buying price will be $4.55 or just $455 for 100 shares of AEG, with an annualized dividend at $0.34 that's a decent 7.4% dividend yield.
There are not many stocks I can afford for options trading, that's why I'm looking on stocks under $6 per share.
