Write put options, company spin off a piece

[hyten1]

folks

 

i was wondering if someone knows this, what happens if you wrote a put options on a company that spin off a piece of it self?

 

for example SHLD are in the process of spinning off a piece, currently shareholder of shld got the write SHORS to buy the new spin off at a pre determine prices

 

 

how does the above event affect someone who wrote a put options on for example SHLD?

 

thanks

 

hy

[gfp]

There's an entire online class for contract adjustments - enjoy!

 

http://education.optionseducation.org/course/view.php?id=5

[Hielko]

Afaik: the option is adjusted so that if it's exercised you get what you would have gotten if you bought 100 shares of stock before the spin-off. 

[hyten1]

thx