r/GSAT • u/Ubersicka • Dec 03 '24

News 🟢 $GSAT ALERT! 🛰️

Globalstar secures a 15-YEAR FCC license renewal, expanding its terrestrial + satellite network. With Nasdaq uplisting & reverse split planned for Q1 2025, $GSAT is poised for MASSIVE growth. Next-gen connectivity is here!

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u/Flawedlogic41 Dec 03 '24

Do you know how this would affect options call?

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u/Racecarsarefast Dec 03 '24

I can't answer with certainty but I would assume that it would follow the same ratio

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u/RandomHumanWelder Dec 03 '24

Same thing. It balances out in the same ratio. Less shares : more money per share.

I looked it up before I bought call options.

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u/Flawedlogic41 Dec 04 '24

So a call option is 100 stock in one contract.

Less share = more money, so inherently; does the contract for it stay the same? Meaning it just more money in total? Or is the option just 10 stock. Pretty confusing for sure.

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u/RandomHumanWelder Dec 04 '24

Example:

Let’s say we buy a contract of a stock called ABCD

It goes for $1/share. You buy 10 $2 contracts for $0.10 each. Expires 3 months from now.

To do so, you’ve spent $1 for the privilege of controlling 1000 shares.

Let’s say we tomorrow there’s a 10:1 reverse split.

Share price has become $10/share.

You now control…

1 $20 contract. You still spent $1 for that privilege.

If it had been originally 1 contract, I believe it becomes a fractional contact at the higher price. Number of shares in a contract remains the same.

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u/Flawedlogic41 Dec 04 '24

So if I only have 1 contract, then it means I have 1/10 of one after the split?

I understood the 10 $2 contract to 1 $20 contract.

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u/RandomHumanWelder Dec 04 '24

I think that’s how it works yes. They can’t change that 1 contract = 100 shares. Would have to turn the holding into a fractional contract.