Dealers face sharp losses
OCC fails to restrike listed options on HSBC rights issue
Offshore derivatives dealers have made losses after the Options Clearing Corporation (OCC) in the US incorrectly evaluated the discounted rights issue announced by HSBC by failing to adjust strike prices on listed options, say market participants.
The failure to adjust option strike prices on HSBC American Depository Receipts (ADRs) has led to windfall gains for buyers of puts and windfall losses for sellers. Option flows on ADRs typically come from European and Asian trading houses.
The decision
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