hello sir
i have query about future trading
ex: i have buy 1 lot of biocon in future trading at the price of 1000 rs they announce the bonus for this share 3:1 what will be the biocon price and what about the lot size please explain briefly or give me any demo video not only bonus, like split and dividend. plz help us
Hello @rp3730
Biocon on 15th June, 2017 issued a 2:1 bonus which means that 2 bonus shares at Rs.0 were issued for 1 share available in demat account of all eligible shareholders.
When bonus is issued, the share price drops, in this case by a factor of (2+1)/1 = 3. So if you held Biocon shares at an average price of Rs.900, the price of each share after bonus would adjust to 900/3 = Rs.300.
You will have 1 share at Rs.300 and 2 shares at Rs.0 which will still maintain your overall investment value.
In case of F&O,
Option strike prices are divided by the factor of 3. A strike price of 1040 became 346.65, 1060 became 353.35 and so on.
F&O lot sizes are multiplied by the factor of 3. The old lot size of 600 is revised to a new market lot of 1800.
The future and option prices are divided by the factor of 3 to maintain the same contract value as of before the bonus issue.