I bought a (call) option on AMAG stock and Robinhood send me a message like this:
What should I do? Are they going to pay me? The expiration date is 11/20 and I don’t know what should I do. Please help.
Personal Finance & Money Stack Exchange is a question and answer site for people who want to be financially literate. It only takes a minute to sign up.Sign up to join this community
Options are sometimes adjusted to account for "corporate actions". Normally this occurs when a company "splits" their shares, so an option on 100 shares becomes an option on 200 shares (actually 2 contracts for 100 shares each) with half the strike if a company does a 2-for-1 split. But it also occurs when a company is acquired (or merges) so that the stock of one company is exchanged for either cash for an all-cash buyout, or stock in the buying company for a stock-for-stock buyout.
A quick Google search shows me that AMAG was bought by Covis for $13.75 cash per share (hence the $1,375 "cash component" for your 100 share option). All options on AMG were converted to a set cash payout of $13.75 per share on 11/20. Your call option is now worthless since it has a strike of $15. Why would you pay $1,500 to get $1,375?
So you're not getting anything from this option. But you're not losing anything either - you already paid the premium upfront, so there's nothing for you to do.