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23 Dec 2024, 08:15 AM
Adjustment of F&O contracts of NMDC on account of bonus.
As per the circular, effective from December 27, 2024, the NMDC F&O contracts will be revised based on the bonus adjustment factor.
Calculation of the adjustment factor: The adjustment factor for a bonus issue of A: B is defined as (A+B)/B. For NMDC Limited, the adjustment factor is (2+1)/1 = 1, since the bonus issue ratio of 2:1.
Adjustment for Futures Contracts:
Futures base price: The adjusted futures base price is 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 13500.
For example:
Assume you are holding a position in NMDC JAN FUT and on pre-ex-date (Dec 26, 2024) futures close at 210, on ex-date the price will be adjusted to 70 (Price on pre-ex-date: 210 / Adjustment Factor: 3)
While the lot size will be adjusted to 13500 (Current lot size: 4500 * Adjustment Factor: 3).
Adjustment for Options Contracts:
Strike Price: The adjusted strike price is calculated by dividing the old strike price by the adjustment factor.
Lot Size: The adjusted lot size is arrived at by multiplying the old market lot by the adjustment factor. The revised lot size would be 13500.
For example:
Assume you hold a position in NMDC Limited 200 CE, the current lot size is 4500. On ex-date, the 200 CE will be adjusted to 67 (Strike Price 200 / Adjustment Factor 3) and the lot size will be adjusted to 13500 (Current Lot Size: 4500 * Adjustment Factor 3).
Also, if you hold equity shares of NMDC in your demat account as of December 27, 2024, you will be entitled to receive the bonus shares, which will be credited to your demat account usually within 2 days from the record date.