How will EMC’s IPO spin-off of VMWare affect my call options on EMC?

Young asks:
EMC’s VMWare is being touted as the biggest IPO since Google went public in 1994. I have January 2010 call options with a strike price of $17.50 on EMC. EMC is currently trading in the $19 to $20 range and word has it that the IPO will be priced between $20 and $25. Obviously we won’t be getting one share of VMWare for each share of EMC. So with each options contract being for a lot of 100 shares of stock, we can’t be getting an options contract for VMWare. So what do options investors get in the case of an IPO spin-off like this?
EMC’s VMWare is being touted as the biggest IPO since Google went public in 1994. I have January 2010 call options with a strike price of $17.50 on EMC. EMC is currently trading in the $19 to $20 range and word has it that the IPO will be priced between $20 and $25. Obviously we won’t be getting one share of VMWare for each share of EMC. So with each options contract being for a lot of 100 shares of stock, we can’t be getting an options contract for VMWare. So what do options investors get in the case of an IPO spin-off like this?


























