03/16/2022 – SPDR S&P Oil & Gas Exploration & Production ETF (XOP)

  by Robert Brauer

Attention, those of you who own SPDR S&P Oil & Gas Exploration & Production ETF (XOP): XOP previously underwent a 1-for-4 reverse split in March 2020. You can read more about the reverse split here.

As a result of the reverse split, Lattco users who owned XOP at that time were left with a position that had a low purchase level (usually 25, 50, or 75 shares) and which they were unable to sell calls against. Recently, prices of many energy related stocks have appreciated significantly due to world events. This has been the case with XOP as well.

Because of the appreciation in value of XOP, we are recommending that any shareholders of XOP that were affected by the April 2020 reverse split should sell all of your shares on Trade Day and transmogrify if necessary.

Please note: if you did not own XOP before the reverse split was enacted, you will not need to transmogrify your position.

When selling your XOP shares, you will need to take the following steps:

  1. After selling XOP, take the net proceeds from the sale and divide it by the number of shares you previously owned of the position prior to the reverse split. For example, if you own 250 shares of XOP at present, you owned 1000 shares prior to the split. This will help you determine the price that XOP was effectively sold for.
  2. If the price you calculated in step #1 is lower than your average cost for XOP, you will proceed with the transmogrification, and use the price from step #1 as your Price of Old Stock for your transmogrification search. If the price calculated in step #1 is above your average cost for XOP, there is no need to transmogrify.

We’re here to help! Here is a link to the Transmogrification document that will tell you step-by-step what to do.

Lattco PRO clientsPlease use this link to access the transmogrification document for your accounts. Also, please give us a call after you have purchased shares for your new position, and before you sell your options; we will need to make some adjustments to your account to properly reflect the transmogrification.

Lattco AutoPilot clients:  At this time, trading screens for Transmogrification are not included in the AutoPilot system. You will need to log into Ally to place three orders to complete the Transmogrification process:

  1. Sell your existing shares of XOP and determine if you need to transmogrify, as instructed above.
  2. Buy the same amount of shares for your new stock that you previously owned of XOP prior to the reverse split.

Once this is complete please notify us and we will adjust your AutoPilot account so that it can suggest the appropriate trades for your new position.

If you have any questions, please don’t hesitate to contact us at
support@snideradvisors.com or 1-888-6-SNIDER. We’ll be happy to walk you through the process.

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