BAJAJFINSV sell position SPLIT IMPACT

F&O
1

I have 2 lot of BAJAJFINSV sell position of 16000 CE and one 1 lot of 17000 CE, what will be the impact of split on bajaj fin
image

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2

@Admin_Team

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3

Bajaj Finserv has declared a bonus in the ratio of 1:1 and split in the ratio of 5:1, so the adjustments will be made for F&O contracts.

Scrip: BAJAJFINSERV
Bonus: 1:1
Split: 5:1
Ex-date: 13th Sept

Adjustment factor:

The adjustment ratio for a bonus of A:B is defined as (A+B)/B, so in the above case, the bonus adjustment will be 2

The adjustment ratio for a split of A:B is defined as A/B, so in the above case, the bonus adjustment will be 5

Final adjustment factor = 5*2 = 10

Adjustment for Option contracts:

Strike price: The revised strike price shall be arrived at by dividing the old strike price by the final adjustment
factor.

Lot size: The revised lot size shall be arrived at by multiplying the old strike price by the final adjustment factor.

With reference to the above-attached position screenshot, your revised positions after the adjustments will be,

Position 1: 1000Qty-BAJAJFINSERV SEP 1600 CE

Position 2: 500Qty-BAJAJFINSERV SEP 1700 CE

The above changes will be effective from Ex-date.

Please refer to this circular to know more.

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4

will there any loss in this split,
as the current loss is -32k, will this loss increase, as there are 2 lots buy 1 lot sell CE

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5

The premium you have paid/received to buy/sell the contract and the CMP will get adjusted as per the adjustment ratio.

Let’s say, you have paid an average price of Rs.1200 to buy 1 lot(50Qty) of BAJAJFINSV SEP 16000CE, so your total premium paid will be Rs.60,000 and the CMP let’s say is 1400. Now your unrealized P&L will be Rs.10,000.

After the corporate action adjustment, your average premium will be revised to Rs.120(Rs.1200/ adjustment factor) and the lot size will be increased to 500Qty, in this case, your total premium paid will be the same Rs.60,000.

The CMP after the adjustment will be reduced to Rs.140. So your unrealized P&L will be the same Rs.10,000.

The split/bonus doesn’t erode the contract value, so the value remains the same.

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