The term “Corporate Event” is used to describe certain types of actions taken by a company’s governing board that directly affect the valuation of the company’s stock.
Actions classified as Corporate Events include stock splits, extraordinary dividends, rights offerings, mergers, spin offs, tender offers, and certain other types of transactions. In some cases, derivatives exchanges must make adjustments to contract specifications with regard to Corporate Events to ensure continuity in the markets for the relevant derivative securities.
This document provides a representative sampling of adjustments related to corporate events that will be applied to OneChicago’s single stock futures contracts by OneChicago’s clearinghouse, The Options Clearing Corporation (OCC). Treatment of OneChicago futures contracts on narrow-based indices is outside the scope of this document. The examples listed in this document represent typical treatments for certain types of events and are not exhaustive of all possible events. OneChicago and its clearinghouses will address each corporate event as it occurs to determine appropriate treatment.
OCC rules govern the application of adjustments for OneChicago single stock futures products.
In the case of bankruptcy of the underlying security
Provided the underlying stock continues trading, OneChicago LLC will continue to trade the Single Stock Future “SSF” and the Options Clearing Corporation “OCC” will continue to clear the SSF and deliver the stock.
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