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05 May 2025, 11:33 AM
Adjustment of F&O contracts of OFSS due to dividend
As per NSE circular effective May 08, 2025, the strikes of OFSS 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 OFSS will be marked-to-market on the last cum-dividend date, i.e., May 07, 2025, 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. 265 (dividend amount) for the respective futures contract.
From May 08, 2025 (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 (50 quantities) of OFSS futures on May 7th, 2025, at Rs. 8690, and the daily settlement price at the market close is Rs. 8740, you would have made a mark-to-market profit of Rs. 50 per share.
On May 08, 2025, the previous day’s position will be carried forward at Rs. 8475 (i.e., 8740 – 265). If the closing price on May 08th, 2025, is Rs. 8500, you’ll make a mark-to-market profit of Rs. 25 per share.
Adjustment for option contracts:
The full value of the dividend, i.e., Rs. 265, 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 the Rs. 8700 Call Option will be reduced to Rs. 8435 on May 8th, 2025, and the positions in the Rs. 8700 Call Option will continue to exist in Rs. 8435 Call Option.
The lot size of the F&O contracts will not change.
Also, if you hold equity shares of OFSS in your Demat account as of May 8th, 2025 (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.
If you have any queries, then post them on our TradingQ&A forum here.