Monday, July 25, 2022 7:03 pm
At its meeting on 26th June 2020, ITC Limited declared a dividend of Rs. 10.15 per equity share and 3rd July 2020 shall be considered to be the last cum dividend date.
Accordingly, all positions in futures contracts of ITC would be marked-to-market on the last cum-dividend date i.e. 3rd July 2020, based on the daily settlement price. Subsequent to such processing, open positions shall be carried forward at the daily settlement price less Rs. 10.15 (dividend amount) for the respective futures contract.
Begin of day margins on 6th July 2020 would be computed for the futures contract of ITC based on the adjusted carry forward value.
An example of adjustment of the futures contract is given below:
Before adjustment:
| Clearing Member | Trading Member | Client Code | Instrument | Symbol | Expiry date | Long position | Long value | Short position | Short value |
|---|---|---|---|---|---|---|---|---|---|
| A | ABC | A1 | FUTSTK | ITC | 30/7/20 | 3200 | 640000 | ||
| B | PQR | A2 | FUTSTK | ITC | 27/8/20 | 0 | 3200 | 640000 | |
| C | XYZ | A3 | FUTSTK | ITC | 24/9/20 | 0 | 6400 | 1280000 |
- Valued at price Rs.200.00/-
After Adjustment:
| Clearing Member | Trading Member | Client Code | Instrument | Symbol | Expiry date | Long position | Long value | Short position | Short value |
|---|---|---|---|---|---|---|---|---|---|
| A | ABC | A1 | FUTSTK | ITC | 30/7/20 | 3200 | 607520 | ||
| B | PQR | A2 | FUTSTK | ITC | 27/8/20 | 0 | 3200 | 607520 | |
| C | XYZ | A3 | FUTSTK | ITC | 24/9/20 | 0 | 6400 | 1215040 |
- Valued at price Rs. 189.85 (Rs.200.00 – Rs.10.15 which is the dividend amount)
Further the full value of dividend (i.e. Rs. 10.15) would be adjusted from the strike prices of the options contracts.
An example of adjustment of the Strike Price is given below:
Before adjustment:
| Clearing Member | Trading Member | Client Code | Instrument | Symbol | Expiry Date | Strike Price | Option Type | Long Position | Short Position |
|---|---|---|---|---|---|---|---|---|---|
| A | ABC | A1 | OPTSTK | ITC | 30-Jul-2020 | 197.50 | CE | 3200 | 0 |
| B | PQR | A2 | OPTSTK | ITC | 27-Aug-2020 | 200.00 | PE | 0 | 3200 |
| C | XYZ | A3 | OPTSTK | ITC | 24-Sep-2020 | 202.50 | CE | 0 | 6400 |
After Adjustment
| Clearing Member | Trading Member | Client Code | Instrument | Symbol | Expiry Date | Strike Price | Option Type | Long Position | Short Position |
|---|---|---|---|---|---|---|---|---|---|
| A | ABC | A1 | OPTSTK | ITC | 30-Jul-2020 | 187.35 | CE | 3200 | 0 |
| B | PQR | A2 | OPTSTK | ITC | 27-Aug-2020 | 189.85 | PE | 0 | 3200 |
| C | XYZ | A3 | OPTSTK | ITC | 24-Sep-2020 | 192.35 | CE | 0 | 6400 |
You may refer to the exchange circular here: https://archives.nseindia.com/content/circulars/CMPT44834.pdf
To know more about corporate actions, read the circular here**:**** https://www.nseindia.com/products-services/equity-derivatives-corporate-actions-adjustments**
