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02 Apr 2024, 10:57 AM
Adjustment of F&O contracts of ASHOKLEY due to dividend
As per NSE circular (web), effective April 03, 2024, the strikes of ASHOKLEY options and the base price of the futures contracts will be revised due to extraordinary dividends.
Adjustment for future contracts:
All positions in futures contracts of ASHOKLEY will be marked-to-market on the last cum-dividend date i.e. April 02, 2024, based on the daily settlement price of the respective futures contract. Subsequently, open positions will be carried forward at the daily settlement price less Rs. 4.95 (dividend amount) for the respective futures contract.
From April 03, 2024 (ex-dividend date), daily mark-to-market settlement of the futures contracts will continue as per normal procedures.
For example:
Assume you bought 1 lot (5000 quantities) of ASHOKLEY futures on April 02, 2024, at Rs. 200, and the daily settlement price at the market close is Rs. 220, you would have made a mark-to-market profit of Rs. 20 per share.
On April 03, 2024, the previous day’s position will be carried forward at Rs. 215.05 (i.e. 220 – 4.95). If the closing price on April 03, 2024, is Rs. 230, you’ll make a mark-to-market profit of Rs. 14.95 per share.
Adjustment for options contracts:
The full value of the dividend i.e. Rs. 4.95 will be deducted from all the cum-dividend strike prices on the ex-dividend date. All positions in existing strike prices will continue to exist in the corresponding new adjusted strike prices.
For example:
The strike price of Rs. 300 Call Option will be reduced to Rs. 295.05 on April 03, 2024, and the positions in Rs. 300 Call Option will continue to exist in Rs. 295.05 Call Option.
The lot size of the F&O contracts will not change.
Also, if you hold equity shares of ASHOKLEY in your demat account as of April 03, 2024 (ex-date), you will be entitled to receive the dividend, which will be credited directly to your primary bank account within 30 to 45 days from the record date.