What is a Corporate Event?
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.
OCC rules govern the application of adjustments for OneChicago single stock futures products:
Bankruptcy of an Underlying Security
Provided the underlying stock continues trading, OneChicago will continue to trade all listed derivatives and the Options Clearing Corporation will continue to clear the derivative and deliver the stock.
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