Explain option splits

[slinkp]

Explain option splits

[jlevy]

Good suggestion. Thanks for sharing. Open to contributions here!

[jlevy]

Topics we should cover would include

• definition of a stock split and common reasons for it
• how this affects existing option and stock holders
• other issues to be aware of with stock splits

If I understand your scenario correctly, however, it wasn't really the stock split that surprised you -- it was just the usual fact that increases in FMV can mean higher taxes at time of exercise. (Which I hope is already covered clearly.)

[slinkp]

Yes, I think I was conflating two things there. The split per se did not affect the tax calculation. It's just that it coincided with an adjustment of FMV, which was driven not by the split but by the series B.