What will happen to my CFC call option when bank of america takes it over?

Question

when CFC stocks convert to BAC, what will happen to my jan 2009 call option for countrywide?

Answer 1

It will become a call option on Bank of America shares.

The number of shares and the strike price will both be adjusted by the exchange to reflect the ratio of BOA shares per Countrywide share.  If this seems confusing, just sell your Countrywide option for cash today for what you can get for it and skip the whole thing.

Answer 2

That's a d**n good question! I'm assuming Bank of America will either call you out or let it expire just as any buyer of the call would.