Options Trading Concepts Live - July 19, 2021 - Stock Splits 101

published 1 week ago by tastytrade, Inc.

Nick and Katie dissect NVDA's upcoming stock split and explain how it impacts stock and options holders in this product. What is a stock split?Traditional: Increases # of shares, lowers stock’s priceReverse: Reduces # of shares, increases stock’s price Considered “good” or “bad”?Market cap/company value doesn’t change, but may attract more participants due to cheaper price How does it affect a stock position? For NVDAStock will split 4:1 so 100 shares will now be 400 at 1/4th the price How does it affect an options position?Options will split 4:1 at 1/4th the price700 strike puts would be 4x $175 puts

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