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Inergy, L.P. Message Board

  • fool2trade fool2trade Oct 23, 2012 11:58 AM Flag

    NRGY option guestion

    Back on April 27th, before the big SPH announcement, I sold an October 20 covered call for $1.10. I got the SPH shares on September 17. When my NRGY option got called on September 26th they took my NRGY shares at 16 and took back the SPH shares and I thought it was all finished. This option did not expire, it was called on September 26.
    Today, October 23rd in my account I see they took out $33.61 per contract. I had done 3 contracts so they just took out $100.83 today. I don't understand why this was taken??? Can anyone answer this? My guess it has something to do with the October expiration date. Anyone with any insight? I dread calling my brokerage and just being put on hold all day. Thanks in advance.

    Sentiment: Hold

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    • That's correct. That is the adjusted NRGY options contract:

      Adjusted contract
      100 Shares of (NRGY)
      10 Shares of (SPH)
      Cash Deliverable of $33.61

      It is because under the terms of the NRGY-SPH deal that is what 100 'old units' of NRGY became.

      • 1 Reply to lizahuang54321
      • Thanks for your reply. I am, however, still confused so perhaps you could explain in more detail. I've done quite a few options, many calls, but not involving a merger. Some of my covered calls have been called ahead of expiration and I would receive the strike price times the number of contracts times 100 and finished. When this was exercised early, I received the adjusted strike price of NRGY from $20 adjusted to $16 and the difference in SPH shares which also got taken. This happened a month before expiration. My shares were taken and I received an amount equal to the 20 strike price. It seemed, like any exercised early option, a done deal. This past Friday being the expiration date should be irrelevant.
        I hope I'm clear as to what occurred and, if not, I'll call my broker and hopefully not have to go through too many levels.
        Thanks again whether you give it another go or not.

        Sentiment: Hold

    • If my broker put me on hold all day he would not be my broker.

 

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