I rcvd an email from Zerodha regards to Coal India Dividend.
On Ex-Date (6th Dec’21), CoalIndia stock & Futures will open 9rs lower compared to close on 5th Dec’21, correct?
In the circular (Link below), there’s an appendix on pg #2.
If I currently hold CoalIndia Dec 150ce, On ex-date, that will be automatically be replaced by 141ce, with same MTM Profit/loss.
Is this correct?
All positions in futures contracts of Coal India will be marked-to-market on the last cum-dividend date i.e. December 3, 2021, 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 9.00 (dividend amount) for the respective futures contract.
The full value of dividend i.e. Rs 9.00 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 instance, the strike price of Rs. 150 call option will be reduced to Rs. 141 on December 6th, 2021 and the positions in Rs. 150 call option will continue to exist in Rs. 141 call option. Your P&L will remain the same.