10 Oct 2024, 11:25 AM
Adjustment of F&O contracts of DRREDDY on account of Split
As per the circular(1 & 2), effective from October 28th, 2024 (ex-date), the DRREDDY 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 DRREDDY, 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 625.
Example: If you are holding a position in DRREDDY OCT FUT and on pre-ex-date (October 25, 2024) futures close at 6700, on ex-date the price will be adjusted to 1340 (Price on pre-ex-date: 6700 / Adjustment Factor: 5). While the lot size will be adjusted to 625 (Current lot size: 125 * 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 625.
Example: If you are holding a position in DRREDDY OCT 6700 CE, the current lot size is 125. On ex-date, the 6700 CE will be adjusted to 1340 CE (Strike Price: 6700 / Adjustment Factor: 5), and the lot size will be adjusted to 625 (Current Lot Size: 125 * Adjustment Factor: 5).
Also, if you hold equity shares of DRREDDY in your demat account as of October 28th, 2024 (ex-date) you will be entitled to receive the split shares, which will be credited to your demat account usually within two working days from the ex-date.