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25 Apr 2024, 11:56 AM
Adjustment of F&O contracts of CANBK on account of Split
As per the circular(web), effective from May 15th, 2024 (ex-date), the CANBK 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 CANBK, the adjustment factor is (5/1) = 5 since the split issue ratio is 5:1.
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 6750.
For example: Assume you are holding a position in CANBK Futures, and on pre-ex-date (May 14th, 2024), futures close at 700, on ex-date, the price will be adjusted to 140 (Price on pre-ex-date: 700 / Adjustment Factor: 5), while the lot size will be adjusted to 6750 (Current lot size: 1350 * Adjustment Factor: 5).
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 6750.
For example: Assume you hold a position in CANBK 650 CE, the current lot size is 1350. On ex-date, the 650 CE will be adjusted to 130 CE (Strike Price: 650 / Adjustment Factor: 5) and the lot size will be adjusted to 6750 (Current Lot Size: 1350 * Adjustment Factor: 5).
Also, if you hold equity shares of CANBK in your demat account as of May 15th, 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.