Impact of corporate action on derivatives, company balance sheets and how to adjust historical data

In this video;

  1. If you’re building a trading system, the historical closing price of a stock is a key input. But sometime, you might notice that there’s an abnormal price drop in the data. Most often than not, this isn’t due to a price drop, but because there’s a split or a bonus. In this video, we look at how to adjust the data for splits and bonuses.

  2. We also look at how splits and bonuses impact futures and option contracts and how they’re adjusted.

  3. While a lot of people know about the impact of corporate actions on prices, not many know about how corporate actions impact the balance sheets of companies. We understand this aspect.

If you don’t know what corporate actions are, you can watch this video first.