I bought an "option to buy" contract of email@example.com for a 0.10 premium. $60 breakeven for firstname.lastname@example.org. Unfortunately the company had a 1/15 reverse split and now my contract is for 6/100 @0.5. Which is really 6@$8 strike I believe. I'm only assuming $8 because the contract just shows 6/100 @ 0.5. The contract is also locked at 75% loss of premium and is currently worthless as the stock price last closed at $1.69 which is about 0.11 pre split.
My question is.. if I execute the call to buy the shares earlier, will it force the brokerage to sell the shares at strike price? What if the option was naked or the share holder already sold during the weeks sell off after the reverse split? Are both option maker and brokerage on the hook to sell me those shares? If so, will the shares be at 0.5 per or 15 x 0.5 a share? If its 6 @ 0.5 wouldn't it be "in the money" at that price? If it's 6 @ $7-8 wouldn't the seller be liable to sell me their long position or buy 6 shares at the $8 strike to sell them to me? If that's the case wouldn't the current share price have to shoot way up to $8 to repurchase if those shares have already been sold or were naked. Also also wouldn't that person be selling me an extremely in the red stock. That would be like scalping paperhands during shorting attacks correct? Just wondering if somehow I can benefit from my situation? Thank you for your help in advance.