Question:

What happens to an Future (&/or other stock derivatives i,e Options) when a company's stock is taken over?

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Say for example I sell a futures contract on Stock X for July 2015. The the company is taken over & so no publicly traded stock is available. In this case is it not true that there would be no stock to be delivered & hence my contract would be void? Same with buying, surely there would be no stock to be delivered? Can someone explain the rules during company aquisitions? And also Mergers? Thanks, Best answer given.

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  1. You can't sell what you ain't got...

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