Corporate action events
COOP: Company Option
Written and maintained by ZagTrader. Last reviewed . How this page is sourced and checked
COOP is a company option: a right granted by the company that lets the holder buy shares in that company at a pre-set price on one or more future dates. Holders decide whether to exercise; options not exercised lapse or roll on to the next exercise date.
- Code
- COOP
- Usually announced as
- VOLU
What COOP means
Some companies, notably in Australia, issue listed or unlisted options over their own unissued shares. Unlike a warrant issued with a bond or a rights issue open to all shareholders, a company option is a separate instrument with its own exercise price and exercise windows. Option holders are not shareholders until they exercise.
To exercise, the holder pays the exercise price and receives new shares. Many company options have several exercise periods: options not exercised in one period carry on to the next, and lapse at final expiry.
When you see it
- An MT564 with
:22F::CAEV//COOP, where the holder can elect to take up shares at the stated price, for example the Canadian CDS market guide shows a COOP purchase offer to holders with:22F::CAMV//VOLU, a record date, an exercise period and a purchase price per share. Check the account servicer’s announcement for the exact options offered. - Compare with EXWA (exercise of a warrant), EXRI (exercise of subscription rights from a rights distribution) and PRIO (a priority offer to existing shareholders).
What to do next
- If the client wants to exercise, instruct with an MT565 before the deadline and make sure the cash for the exercise price is available on the debit date.
- When the MT566 arrives, reconcile the cash debit, the option debit and the share credit. Note options that carry on to the next exercise period, and close positions that lapse at final expiry.