Dividend in FNO stocks

[ShubhS9]

@Ddhar

If I short sell future of a stock and stock is going to give Rs 8/- as dividend next day then stock prise will be adjusted by Rs 8/- so can I say that because of this adjustment future’s price will correct and I will hv almost 8 point profit from my short position???Plz put some light on this

That’s not how it works.

If any company announces extraordinary dividend (>2% of the CMP), on the ex-date, the F&O contracts are adjusted according to the adjustment factor. More on this here:

Shorting stock future on ex date in india

If you’re looking to make a profit, then this is not possible On the ex-date, the exchange will carry out adjustments in F&O contracts as per the formula prescribed by SEBI. Adjustments will result in a change of base price, option strike values & the market lot depending on the adjustment factor and are carried out in such a way that the value of the position of the market participants, on the cum and ex-dates for the corporate action, shall continue to remain the same…