On Monday morning, which was just four days ago (but feels like at least a month ago, and I’m serious), I asked the group what happens with owners of options in companies whose trading is halted. The day was too insane for me to check for answers, but thanks to this Forbes article, now I know.
For instance, let’s say that a month ago, you were struck by a vision that Silicon Valley Bank and Signature Bank of New York were totally doomed, and you loaded your entire portfolio into March 17 2023 puts on both of these. And then the news tumbles out, which blasts SIVB to pieces (which this chart under-represents, because the price is actually $0 now)………
……and does the same with SBNY (and, again, the price is effectively $0, but this chart kindly only takes into account the final trade).
Oh my GARD. Oh mah GARD, you are R-I-C-H! You weren’t just short the stock, you had PUTS, which is 100 times better. Well done, my man! You had a vision, you were right, and you are going to make back big-time!
Ummm, not so fast. Turns out, since the world is made to harm bears at every opportunity, you actually aren’t going to get DICK. Indeed, one pissed-off chap created a website specifically so SBNY put holders could share their chat sessions with their brokers, all of whom are telling them to pound sand.
Mercifully, I am not in the position of owning puts on any of this bankrupt organizations, and I’d be beyond furious if I was. You’ve got to believe there are at least a few guys out there who thought they had hit the jackpot, when in fact their contracts are going to expire Friday worth absolutely nothing.