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18 Sep 2023, 05:00 PM
Adjustment of F&O contracts of PFC on account of bonus.
As per the circular(web), effective from September 21st, 2023, the PFC F&O contracts will be revised based on the bonus adjustment factor.
Calculation of the adjustment factor: Adjustment factor for Bonus issue of A:B is defined as (A+B)/B. In the case of PFC, the adjustment factor is (1+4)/4 = 1.25, since the bonus issue ratio is 1:4.
Adjustment for Futures Contracts:
Futures base price: The adjusted futures base price will be arrived at by dividing the settlement price of the future one day before the ex-date by the adjustment factor.
Futures lot size: The adjusted market lot will be arrived at by multiplying the old market lot by the adjustment factor. The revised market lot would be 7750.
For example: Assume you are holding a position in PFC Futures, and on pre-ex-date (September 20th, 2023), futures close at 300, on ex-date the price will be adjusted to 240 (Price on pre-ex-date: 300 / Adjustment Factor: 1.25), while the lot size will be adjusted to 7750 (Current lot size: 6200 * Adjustment Factor: 1.25).
Adjustment for Options Contracts:
Strike Price: The adjusted strike price will be arrived at by dividing the old strike price by the adjustment factor.
Lot Size: The adjusted lot size will be arrived at by multiplying the old market lot by the adjustment factor. The revised lot size would be 7750.
For example: Assume you hold a position in PFC 250 CE and the current lot size is 6200. On ex-date, the 250 CE will be adjusted to 200 (Strike Price: 250 / Adjustment Factor 1.25), and the lot size will be adjusted to 7750 (Current Lot Size: 6200 * Adjustment Factor: 1.25).
Also, if you hold equity shares of PFC in your demat account as of September 21st, 2023 (ex-date), you will be entitled to receive the bonus shares, which will be credited to your demat account usually within 15 – 20 days from the record date.