companies whose shares serve as the underlying assets of equity options may choose to undertake corporate actions from time to time. As a result of these corporate actions, changes in stock prices may ensue.
When corporate actions that affect the underlying stock price are undertaken, TASE responds by adjusting the specifications of the option to ensure, in as much as possible, that the economic value of the option is unaltered.
It must be emphasized that the company and not TASE initiates the corporate action and that TASE merely makes adjustments to the existing series of traded options.
The most common type of corporate events that trigger technical adjustments include: cash dividends; non-cash distributions; stock dividends; rights offerings; stock split and reverse stock split
