Lloyds put opions...rights issue rip-off?

wideangle

Newbie
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Lloyds put options...am I being ripped off?

Are there any options experts here today please? I have only been trading options for 2 months!

I think I am being ripped off by my broker, but would be interested and grateful for any opinions.

I hold 40 LloydsBanking 106p June puts at 25p each. Yesterday the share price closed at 88.61p, and the options were priced at 26.38p.

Today Lloyds had a massive rights issue (raising £13.5billion), offering 1.34 new shares for each existing share at 37p per new share.

Today the shares have settled at 57.8p, and my broker is telling me my put option strike price has been reduced to 70p, and the current option price is 16p.

So, I really feel I have been shafted. I can just about grasp why the strike price has been adjusted ( although i still feel I am being robbed, as I didn't get the chance to sell my rights in the market as a shareholder would have), but I can't see how they have arrived at a price of 16p for the rights, which is 36% down on yesterday's price.

Surely they have got it wrong!!

Shouldn't I receive some sort of premium refund to compensate for the rights issue adjustments.

Anyway, any help would be appreciated before I make a formal complaint.
 
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