The Apple Inc. (“AAPL”) 7-for-1 common stock split is fast approaching. This is Apple’s fourth stock split since going public (the last one was February, 2005).
If you are trading AAPL options or stock there a few key dates and facts you need to be aware of:
- June 2, 2014, is the record date, which determines which shareholders are entitled to receive additional shares.
- June 6, 2014, shareholders are due split shares after the close of business on that date.
- June 9th, 2014 is the Ex-Date. The shares will trade at the new split adjusted price. Contract Adjustments in all outstanding AAPL option series will be adjusted to reflect this 7-for-1 common stock split on June 9th at 8:30 A.M. Chicago time. The OCC will issue six additional contracts for each open contract on the ex-date.
- Also on the ex-date, each AAPL series will have an adjusted exercise price equal to one-seventh of the exercise price rounded to the nearest 1/100th of a point for each AAPL series existing on the business day immediately prior to the ex-date. The option symbol will remain the same.
- CBOE Research Circular #RS14-231 explains how the adjusted exercise prices work. For example on June 9th the AAPL June 600.00 strike calls and puts will convert to the AAPL June 85.71 strike calls and puts. So if you owned a June 600 call and wished to close the position on June 9th, you would sell (to close) seven June 85.71 strike price calls.
So you have several resources to find more information.
- CBOE Research Circular #RS14-231 is a good starting point.
- Investor Relations at Aaple has a FAQ page explaining the stock split at http://investor.apple.com/faq.cfm?FaqSetID=2.
- Check with your brokerage firm for guidance on the split.
Good trading. MK