Hi Jimbo, options entitle you to convert them to stocks at the...

Hi Jimbo, options entitle you to convert them to stocks at the strike price anytime within the expiry date. So let's say the company gets sold for $1 a share within the expiry date you can convert the options for 55c and receive $1 lump sum payment for your stock. The options are worthless if TO price comes in below 55c and it would be foolish to convert them to stocks.

In the event of a spin off, to the best of my knowledge the options entitle you to convert to 1 share of old Co. and 1 share of spin Co. for 55c so your option is in the money if the combined value of two companies is above 55c.