Comment on Application of Option Greeks

PRABHAT commented on 24 Aug 2016, 06:14 PM

Hi,
I have some confusion about my Option Trade on Hindustan Petroleum : In the month of August 2016 I bought 1 lot of HPCL September 2016 CE 1300 @Rs.25 . The company has declared Bonus of two shares for one share held and the ex-bonus date is 17th September 2016. Now, in the above circumstances, what will be position of my above CE Option which is due to expire at the end of September 2016. I have two queries.
1) whether the tradable lot will be splitted in view of ex-bonus on 17th Sept.16; if so,
ex-bonus how many lots will be there?
2) Whether the CE1300 (Call) will also be splitted due to ex-bonus in the mid of the Month
(i.e.17th Sept.2016); if so , then what will be the splitting amount / ratio
Please guide

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