Anyone know the impact on long call options when a company reorganizes and issues new equity thereby diluting the shares? Are they unchanged or do my options increase proportionately with the dilution of the share base?
If a company issues new shares, it has no affect on the contractual terms of your option. The number of shares covered by the contract (usually 100), the strike price, and the expiration date all remain the same.
The only affect on your option will be the market's perception of the corporate event. If it is favorable and share price increases enough, your long call benefits. If not favorable, it will suffer