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22 Dec 2023, 10:00 AM
Adjustment of F&O contracts of NESTLEIND on account of Split
As per the circular(web), effective from January 05th, 2024(ex-date), the NESTLEIND F&O contracts will be revised based on the split adjustment factor.
Calculation of the adjustment factor: The adjustment factor for the split issue of A:B is defined as (A/B). In the case of NESTLEIND, the adjustment factor is (10/1) = 10 since the split issue ratio is 10:1.
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 400.
For example: Assume you are holding a position in NESTLEIND Futures, and on pre-ex-date (January 04th, 2024), futures close at 25,000, on ex-date the price will be adjusted to 2500 (Price on pre-ex-date: 25,000 / Adjustment Factor: 10), while the lot size will be adjusted to 400 (Current lot size: 40 * Adjustment Factor: 10).
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 400.
For example: Assume you hold a position in NESTLEIND 25000 CE, the current lot size is 40. On ex-date, the 25000 CE will be adjusted to 2500 CE(Strike Price: 25,000 / Adjustment Factor: 10) and the lot size will be adjusted to 400 (Current Lot Size: 40 * Adjustment Factor: 10).
Also, if you hold equity shares of NESTLEIND in your demat account as of January 05th, 2024 (ex-date) you will be entitled to receive the split shares, which will be credited to your demat account usually within a week from the ex-date.