What Are Non-Standard Options?

Non-standard options are option contracts that have been converted from their original terms as a result of corporate actions involving the underlying security. Events such as stock splits, reverse splits, mergers, acquisitions, special cash dividends, or spinoffs can all require the Options Clearing Corporation (OCC) to adjust an existing option so that the economic value of the contract remains equivalent for the holder.

When an adjustment occurs, the option's deliverables may change from the standard 100 shares. Its strike price and, in some cases, the contract multiplier may also be adjusted. Because these contracts no longer match the standard specifications, they are listed differently in the options chain.

For example: instead of appearing as "ABC" the adjusted contract may appear as "ABC1." A contract displayed as "20 Jan 2023 5/100 ABC1" would indicate that the deliverable has been adjusted to 5 shares, reflected by the "5/100" while the "ABC1" ticker identifies it as a non-standard option. If the underlying stock experiences multiple corporate actions over time, additional rounds of adjustments may be made, leading to designations such as ABC2, ABC3, and so on.

Corporate actions can vary widely, resulting in adjustments to non-standard options that may increase or decrease the deliverable or, in some cases, alter strike prices in non-uniform ways.

Currently, Webull Singapore does not support opening new positions in these non-standard contracts. Existing non-standard option positions are only allowed to be liquidated, and may also be subject to forced liquidation if they result in an uncovered (naked) call position.

For every corporate action that results in a non-standard option, the OCC publishes an official memo describing the exact terms of the adjustment. These memos are publicly available and can be accessed at no cost on the OCC's website.