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12 Jun 2024, 09:16 PM
Adjustment of F&O contracts of CANBK due to dividend
As per NSE circular (web), effective June 14, 2024, the strikes of CANBK 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 CANBK will be marked-to-market on the last cum-dividend date i.e. June 13, 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. 3.22 (dividend amount) for the respective futures contract.
From June 14, 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 (2300 quantities) of CANBK futures on June 13, 2024, at Rs. 150, and the daily settlement price at the market close is Rs. 155, you would have made a mark-to-market profit of Rs. 5 per share.
On June 14, 2024, the previous day’s position will be carried forward at Rs. 151.78 (i.e. 155 – 3.22). If the closing price on June 14th, 2024, is Rs. 157, you’ll make a mark-to-market profit of Rs. 5.22 per share.
Adjustment for options contracts:
The full value of the dividend, i.e. Rs. 3.22 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. 100 Call Option will be reduced to Rs. 96.78 on June 14, 2024, and the positions in Rs. 100 Call Option will continue to exist in Rs. 96.78 Call Option.
The lot size of the F&O contracts will not change.
Also, if you hold equity shares of CANBK in your Demat account as of June 14, 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.