Oil India Limited (OIL) has declared the dividend of Rs. 8.50 per equity share and February 21st is the ex-date. Will this effect the F&O contracts?

Oil India Limited (OIL) has declared the dividend of Rs. 8.50 per equity share [Ex-date: 21-02-2019] Will this effect the F&O contracts? Can someone explain?

The F&O contracts will be adjusted for the dividend.SEBI guidelines state that

The adjustment in strike price shall be carried out in the following cases of declaration of dividends: Dividends declared at and above 5% of the market value of the underlying stock.

In this case, the dividend is over 5%.

Adjustments for Futures Contracts:

Base price of the Futures contracts on February 21, 2019 will be reference rate less aggregate amount
of dividend i.e. Rs. 8.50/-. The reference rate to be reckoned for this purpose shall be the daily mark to
market settlement price of the relevant futures contract.

Adjustments for Options Contracts:

The full value of dividend i.e. Rs. 8.50/- would be deducted from all the cum-dividend strike prices on
the ex-dividend date. The details of the old and corresponding new options contracts that shall be
available for trading from February 21, 2019, would be notified on February 20, 2019.

You can refer to this circular from NSE.

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