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If an underlying stock splits, are the options just adjusted accordingly (i.e. quantity I own is multiplied, and strike price is divided)?

For example, AAPL will have a 7 for 1 split soon.

If I have 3 contracts of a $660 call option, will those become 21 contracts with a $94.2857 strike price?

That seems to make sense mathematically, but will all the strike prices really be at such uneven values? It's hard to imagine that the option chain will have strike prices like this - there will be so many of them and at such odd prices. Will the option prices look like: ..., $91.43, $92.14, $92.86, $93.57, $94.29, $95, $95.71, $96.43, $97.14, etc.?

Finally, will new options with round strike prices be issued, adding even more to the above list?

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    see finance.yahoo.com/q/op?s=AWH+Options for a recently split stock's options. – JoeTaxpayer Jun 6 '14 at 15:54
  • Thanks, that's what I figured, but I just had never seen option prices like that. Great example. – Jer Jun 6 '14 at 16:07
  • Also to answer my last question, I guess all round (i.e. multiples of $5) strikes will already exist, since if $5 divides x, then obviously $5 divides 7x. – Jer Jun 6 '14 at 16:13
  • Multiples of $35 become multiple of $5, e.g. $70 is now $10, $140, now $20, etc. The $500 (which I own) becomes $71.43. eew. – JoeTaxpayer Jun 6 '14 at 21:50
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It will be similar to what you have said -- the options price will adjust accordingly following a stock split -

Here's a good reference on different scenarios - Splits, Mergers, Spinoffs & Bankruptcies

also if you have time to read Characteristics & Risks of Standardized Options

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Since you asked about Apple, and I happen to have two positions -

enter image description here

This is what happened. I was long the $500, short the $600, in effect, betting Apple would recover from its drop from $700 down to $450 or so. Friday, my target was to hope that Apple remain above $600, but not really caring how much it went over. Now, post split, the magic number is $85.71. My account shows the adjusted option pricing, but doesn't yet show AAPL's new price.

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