Spin-off of HGT after writting call on XTO Energy?

Question

I own XTO and wrote calls against it and a while back they spun-off some shares of HGT(as a dividend). I still own XTO and that call along with HGT.
Is HGT somehow associated with that call? Can I sell HGT free and clear? The call is a 35Jan08(.LILAG)
If you can give me a link where you found it, I would greatly appreciate it.

Dan

Answer 1

Whenever there is a spin off, existing options are adjusted to change the underlying to be the same thing the owner of 100 shares received in the spin off. In this case:

"The XTO/OUO/YTN series were adjusted to require the per-contract
delivery or receipt of: (A) 100 shares of XTO Energy Inc. ("XTO"); plus
(B) 5 Units of Hugoton Royalty Trust ("HGT"); plus (C) $29.05 cash in
lieu of 0.9609 fractional Unit of HGT (based on a whole-share price of
$30.2283 for fractional HGT shares). The XTO/OUO/YTN option symbols
changed to XTW, ZOV or LIL, as the case may be."

To find a contract adjustment, go to

http://www.cboe.com/tradtool/contracts.aspx

and search for the ticker symbol of the underlying security.