22 Jul 2025, 06:30 PM

Adjustment of F&O contracts of UNIONBANK due to dividend

As per NSE circular effective July 25, 2025, the strikes of UNIONBANK 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 UNIONBANK will be marked-to-market on the last cum-dividend date, i.e., July 24, 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 ₹4.75 (dividend amount) for the respective futures contract.

From July 25, 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 (4425 quantities) of UNIONBANK July futures on July 24, 2025, at ₹141, and the daily settlement price at market close is ₹143, you would have made a mark-to-market profit of ₹2 per share.

On July 25, 2025, the previous day’s position will be carried forward at ₹136.25 (i.e., 141 – 4.75). If the closing price on July 25, 2025, is ₹138, you’ll make a mark-to-market profit of ₹1.75 per share.

Adjustment for option contracts:

The full value of the dividend, i.e., ₹4.75, 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 140 Call Option will be reduced to 135.25 on July 25, 2025, and the positions in the 140 Call Option will continue to exist in the 135.25 Call Option.

The lot size of the F&O contracts will not change.

Also, if you hold equity shares of UNIONBANK in your Demat account as of July 25, 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.